Maryland | 77-0404318 | ||
(State or other jurisdiction of | (I.R.S. Employer | ||
incorporation or organization) | Identification No.) |
Title of each class | Trading Symbol | Name of each exchange on which registered |
Common Stock, par value $0.01 per share | AVB | New York Stock Exchange |
99.1 | Press Release of AvalonBay Communities, Inc. dated July 31, 2019, including attachments. |
99.2 | Supplemental discussion of second quarter 2019 operating results dated July 31, 2019, including attachments. |
AVALONBAY COMMUNITIES, INC. | |||
Dated: July 31, 2019 | By: | /s/ Kevin P. O’Shea | |
Kevin P. O’Shea | |||
Chief Financial Officer |
Q2 2019 Results Compared to Q2 2018 | |||||||||
Per Share (1) | |||||||||
EPS | FFO | Core FFO | |||||||
Q2 2018 per share reported results | $ | 1.84 | $ | 2.21 | $ | 2.23 | |||
Established and Redevelopment Community NOI | 0.07 | 0.07 | 0.07 | ||||||
Other Stabilized and Development Community NOI | 0.08 | 0.08 | 0.07 | ||||||
Capital markets activity | (0.07 | ) | (0.07 | ) | (0.06 | ) | |||
Overhead expense and other | (0.06 | ) | (0.06 | ) | (0.05 | ) | |||
Joint venture income | 0.01 | 0.01 | 0.01 | ||||||
Gain on sale of real estate and depreciation expense | (0.66 | ) | — | — | |||||
Q2 2019 per share reported results | $ | 1.21 | $ | 2.24 | $ | 2.27 | |||
(1) For additional detail on reconciling items between EPS, FFO and Core FFO, see Definitions and Reconciliations, table 5. | |||||||||
YTD 2019 Results | |||||||||
Comparison to YTD 2018 | |||||||||
Per Share (1) | |||||||||
EPS | FFO | Core FFO | |||||||
YTD 2018 per share reported results | $ | 2.87 | $ | 4.38 | $ | 4.41 | |||
Established and Redevelopment Community NOI | 0.18 | 0.18 | 0.18 | ||||||
Other Stabilized and Development Community NOI | 0.16 | 0.16 | 0.14 | ||||||
Capital markets activity | (0.13 | ) | (0.13 | ) | (0.13 | ) | |||
Overhead expense and other | (0.07 | ) | (0.07 | ) | (0.06 | ) | |||
Joint venture income and management fees | 0.03 | 0.03 | 0.03 | ||||||
Gain on sale of real estate and depreciation expense | (0.61 | ) | — | — | |||||
YTD 2019 per share reported results | $ | 2.43 | $ | 4.55 | $ | 4.57 | |||
(1) For additional detail on reconciling items between EPS, FFO and Core FFO, see Definitions and Reconciliations, table 5. | |||||||||
Q2 2019 Compared to Q2 2018 | ||||||||||||
Rental Revenue (1)(2) | Opex (2)(3) | NOI | % of NOI (4) | |||||||||
New England | 2.8 | % | 2.6 | % | 2.8 | % | 14.3 | % | ||||
Metro NY/NJ | 3.1 | % | 1.8 | % | 4.0 | % | 22.7 | % | ||||
Mid-Atlantic | 2.8 | % | 4.0 | % | 2.3 | % | 15.9 | % | ||||
Pacific NW | 4.8 | % | (1.7 | )% | 7.6 | % | 5.7 | % | ||||
No. California | 3.2 | % | 7.7 | % | 1.9 | % | 20.6 | % | ||||
So. California | 3.1 | % | 7.5 | % | 1.6 | % | 20.8 | % | ||||
Total | 3.1 | % | 4.2 | % | 2.8 | % | 100.0 | % | ||||
(1) See full release for additional detail. | ||||||||||||
(2) 2018 results have been adjusted to reflect uncollectible lease revenue as an adjustment to revenue. See Definitions and Reconciliations, table 1. | ||||||||||||
(3) See full release for discussion of variances. | ||||||||||||
(4) Represents % of total NOI for Q2 2019 in the presented regions, including amounts related to communities that have been sold or that are classified as held for sale. | ||||||||||||
YTD 2019 Compared to YTD 2018 | ||||||||||||
Rental Revenue (1)(2) | Opex (2)(3) | NOI | % of NOI (4) | |||||||||
New England | 3.0 | % | 1.2 | % | 4.1 | % | 14.2 | % | ||||
Metro NY/NJ | 3.1 | % | 1.5 | % | 4.0 | % | 22.4 | % | ||||
Mid-Atlantic | 3.0 | % | 2.1 | % | 3.4 | % | 16.0 | % | ||||
Pacific NW | 4.8 | % | (2.6 | )% | 8.1 | % | 5.7 | % | ||||
No. California | 3.3 | % | 2.6 | % | 3.6 | % | 20.9 | % | ||||
So. California | 3.4 | % | 4.7 | % | 3.0 | % | 20.8 | % | ||||
Total | 3.3 | % | 2.1 | % | 3.8 | % | 100.0 | % | ||||
(1) See full release for additional detail. | ||||||||||||
(2) 2018 results have been adjusted to reflect uncollectible lease revenue as an adjustment to revenue. See Definitions and Reconciliations, table 1. | ||||||||||||
(3) See full release for discussion of variances. | ||||||||||||
(4) Represents % of total NOI for YTD 2019 in the presented regions, including amounts related to communities that have been sold or that are classified as held for sale. | ||||||||||||
• | Avalon Brea Place, located in Brea, CA; |
• | Avalon Foundry Row, located in Owings Mill, MD; and |
• | Avalon Marlborough II, located in Marlborough, MA. |
• | The Company issued $450,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds of $446,877,000. The notes mature in June 2029 and were issued with a 3.30% coupon. The effective interest rate of the notes is 3.66%, including the impact of an interest rate hedge and offering costs. |
• | The Company repaid an aggregate $47,217,000 principal amount of mortgage notes secured by one operating community at par at the scheduled maturity date, of which $13,363,000 was a 2.99% fixed rate mortgage note and $33,854,000 was a variable rate mortgage note. |
• | The Company repaid an aggregate $84,835,000 principal amount of variable rate mortgage notes secured by four operating communities at par in advance of their June 2025 maturity date. The Company utilized $47,174,000 of restricted cash held in principal reserve funds to repay a portion of the outstanding indebtedness. |
Projected EPS, Projected FFO and Projected Core FFO Outlook (1) | ||||
Full Year 2019 | ||||
Low | High | |||
Projected EPS | $5.78 | - | $5.98 | |
Projected FFO per share | $9.13 | - | $9.33 | |
Projected Core FFO per share | $9.25 | - | $9.45 | |
(1) See Definitions and Reconciliations, table 10, for reconciliations of Projected FFO per share and Projected Core FFO per share to Projected EPS. | ||||
July 2019 Full Year Outlook Comparison | |||||||||
to February 2019 Full Year Outlook | |||||||||
Per Share | |||||||||
EPS | FFO | Core FFO | |||||||
Projected per share - February 2019 outlook (1) | $ | 5.43 | $ | 9.25 | $ | 9.30 | |||
Established and Redevelopment Community NOI | — | — | — | ||||||
Other Stabilized and Development Community NOI | (0.06 | ) | (0.06 | ) | (0.02 | ) | |||
Capital markets activity | 0.09 | 0.09 | 0.08 | ||||||
Overhead expense, joint venture income and other | (0.05 | ) | (0.05 | ) | (0.01 | ) | |||
Gain on sale of real estate and depreciation expense | 0.47 | — | — | ||||||
Projected per share - July 2019 outlook (1) | $ | 5.88 | $ | 9.23 | $ | 9.35 | |||
(1) The mid-point of the Company's outlook. | |||||||||
TABLE 1 | |||||||||||||||||||||||||||||
Q2 2019 | Q2 2018 | Q2 2019 to Q2 2018 % Change | Q1 2019 | Q2 2019 to Q1 2019 % Change | YTD 2019 | YTD 2018 | YTD 2019 to YTD 2018 % Change | ||||||||||||||||||||||
Total revenue, excluding uncollectible lease revenue | $ | 460,297 | $ | 446,270 | 3.1 | % | $ | 454,091 | 1.4 | % | $ | 914,390 | $ | 886,407 | 3.2 | % | |||||||||||||
Uncollectible lease revenue | (2,498 | ) | (2,683 | ) | (6.9 | )% | (1,905 | ) | 31.1 | % | (4,403 | ) | (5,988 | ) | (26.5 | )% | |||||||||||||
Total revenue, including uncollectible lease revenue | 457,799 | 443,587 | 3.2 | % | 452,186 | 1.2 | % | 909,987 | 880,419 | 3.4 | % | ||||||||||||||||||
Rental revenue, excluding uncollectible lease revenue | 459,690 | 446,014 | 3.1 | % | 453,625 | 1.3 | % | 913,315 | 885,965 | 3.1 | % | ||||||||||||||||||
Uncollectible lease revenue | (2,498 | ) | (2,683 | ) | (6.9 | )% | (1,905 | ) | 31.1 | % | (4,403 | ) | (5,988 | ) | (26.5 | )% | |||||||||||||
Rental revenue, including uncollectible lease revenue | 457,192 | 443,331 | 3.1 | % | 451,720 | 1.2 | % | 908,912 | 879,977 | 3.3 | % | ||||||||||||||||||
Operating expenses, excluding uncollectible lease revenue | 131,025 | 125,751 | 4.2 | % | 126,340 | 3.7 | % | 257,367 | 251,983 | 2.1 | % | ||||||||||||||||||
Uncollectible lease revenue | 2,498 | 2,683 | (6.9 | )% | 1,905 | 31.1 | % | 4,403 | 5,988 | (26.5 | )% | ||||||||||||||||||
Operating expenses, including uncollectible lease revenue | $ | 133,523 | $ | 128,434 | 4.0 | % | $ | 128,245 | 4.1 | % | $ | 261,770 | $ | 257,971 | 1.5 | % | |||||||||||||
TABLE 2 | ||||||||||||||||
Q4 2018 | ||||||||||||||||
Established | Other Stabilized | Redevelopment | Development | |||||||||||||
Rental revenue, excluding uncollectible lease revenue | $ | 453,242 | $ | 70,302 | $ | 32,086 | $ | 2,282 | ||||||||
Uncollectible lease revenue | (2,023 | ) | (755 | ) | (147 | ) | (5 | ) | ||||||||
Rental revenue, including uncollectible lease revenue | 451,219 | 69,547 | 31,939 | 2,277 | ||||||||||||
Operating expenses, excluding uncollectible lease revenue | 124,954 | 22,760 | 9,738 | 1,165 | ||||||||||||
Uncollectible lease revenue | 2,023 | 755 | 147 | 5 | ||||||||||||
Operating expenses, including uncollectible lease revenue | $ | 126,977 | $ | 23,515 | $ | 9,885 | $ | 1,170 | ||||||||
TABLE 3 | ||||||||
Q2 | YTD | |||||||
2019 | 2019 | |||||||
GAAP Gain | $ | 20,604 | $ | 36,986 | ||||
Accumulated Depreciation and Other | (13,792 | ) | (23,991 | ) | ||||
Economic Gain (Loss) | $ | 6,812 | $ | 12,995 | ||||
TABLE 4 | ||||
Q2 | ||||
2019 | ||||
Net income | $ | 168,305 | ||
Interest expense, net, inclusive of loss on extinguishment of debt, net | 50,239 | |||
Depreciation expense | 162,693 | |||
EBITDA | $ | 381,237 | ||
Gain on sale of communities | (20,530 | ) | ||
Joint venture EBITDAre adjustments (1) | 5,789 | |||
EBITDAre | $ | 366,496 | ||
Gain on other real estate transactions | (34 | ) | ||
Business interruption insurance proceeds | (435 | ) | ||
Severance related costs | 1,353 | |||
Development pursuit write-offs and expensed transaction costs, net | 1,327 | |||
Potential residential for-sale condominium marketing and administrative costs | 945 | |||
Legal settlements | 38 | |||
Core EBITDAre | $ | 369,690 | ||
(1) Includes joint venture interest, taxes, depreciation, gain on dispositions of depreciated real estate and impairment losses, if applicable, included in net income. | ||||
TABLE 5 | ||||||||||||||||
Q2 | Q2 | YTD | YTD | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income attributable to common stockholders | $ | 168,281 | $ | 254,662 | $ | 338,647 | $ | 396,305 | ||||||||
Depreciation - real estate assets, including joint venture adjustments | 164,830 | 156,289 | 329,576 | 314,772 | ||||||||||||
Distributions to noncontrolling interests | 12 | 11 | 23 | 22 | ||||||||||||
Gain on sale of previously depreciated real estate | (20,530 | ) | (105,201 | ) | (35,365 | ) | (105,201 | ) | ||||||||
FFO attributable to common stockholders | 312,593 | 305,761 | 632,881 | 605,898 | ||||||||||||
Adjusting items: | ||||||||||||||||
Joint venture losses | — | 7 | — | 7 | ||||||||||||
Joint venture promote (1) | — | — | — | (925 | ) | |||||||||||
Casualty gain, net on real estate | — | — | — | (58 | ) | |||||||||||
Business interruption insurance proceeds | (435 | ) | — | (607 | ) | — | ||||||||||
Lost NOI from casualty losses covered by business interruption insurance (2) | — | 832 | — | 1,730 | ||||||||||||
Loss on extinguishment of consolidated debt | 229 | 642 | 509 | 1,039 | ||||||||||||
Advocacy contributions | — | 303 | — | 606 | ||||||||||||
Severance related costs | 1,353 | 132 | 1,372 | 502 | ||||||||||||
Development pursuit write-offs and expensed transaction costs, net | 1,327 | 243 | 1,604 | 570 | ||||||||||||
Potential residential for-sale condominium marketing and administrative costs | 945 | 158 | 1,418 | 158 | ||||||||||||
Potential residential for-sale condominium imputed carry cost (3) | 506 | — | 506 | — | ||||||||||||
Gain on other real estate transactions | (34 | ) | (370 | ) | (301 | ) | (323 | ) | ||||||||
Legal settlements | 38 | 67 | (978 | ) | 367 | |||||||||||
Income taxes | — | — | (6 | ) | — | |||||||||||
Core FFO attributable to common stockholders | $ | 316,522 | $ | 307,775 | $ | 636,398 | $ | 609,571 | ||||||||
Average shares outstanding - diluted | 139,618,231 | 138,215,010 | 139,227,376 | 138,184,295 | ||||||||||||
Earnings per share - diluted | $ | 1.21 | $ | 1.84 | $ | 2.43 | $ | 2.87 | ||||||||
FFO per common share - diluted | $ | 2.24 | $ | 2.21 | $ | 4.55 | $ | 4.38 | ||||||||
Core FFO per common share - diluted | $ | 2.27 | $ | 2.23 | $ | 4.57 | $ | 4.41 | ||||||||
(1) Represents the Company's promoted interest in AvalonBay Value Added Fund II, L.P. | ||||||||||||||||
(2) Amount for 2018 is for the Maplewood casualty loss, which occurred in Q1 2017, and for which the Company recognized $3,495 in business interruption insurance proceeds in Q3 2017. | ||||||||||||||||
(3) Represents the imputed carry cost of potential for-sale residential condominium units where construction is complete and a potential for-sale condominium strategy is being pursued. The Company computes this adjustment by multiplying the Total Capital Cost of completed and unsold potential for-sale residential condominium units by the Company's weighted average unsecured debt rate. | ||||||||||||||||
TABLE 6 | |||
Core EBITDAre | $ | 369,690 | |
Interest expense, net | $ | 50,010 | |
Interest Coverage | 7.4 times | ||
TABLE 7 | |||
Total debt principal (1) | $ | 7,414,889 | |
Cash and cash in escrow | (330,044 | ) | |
Net debt | $ | 7,084,845 | |
Core EBITDAre | $ | 369,690 | |
Core EBITDAre, annualized | $ | 1,478,760 | |
Net Debt-to-Core EBITDAre | 4.8 times | ||
(1) Balance at June 30, 2019 excludes $9,346 of debt discount and $35,522 of deferred financing costs as reflected in unsecured notes, net, and $14,530 of debt discount and $3,274 of deferred financing costs as reflected in notes payable on the Condensed Consolidated Balance Sheets. | |||
TABLE 8 | ||||||||||||||||||||||||
Q2 | Q2 | Q1 | Q4 | YTD | YTD | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Net income | $ | 168,305 | $ | 254,543 | $ | 170,418 | $ | 385,636 | $ | 338,723 | $ | 396,133 | ||||||||||||
Indirect operating expenses, net of corporate income | 23,018 | 19,677 | 19,722 | 21,849 | 42,740 | 38,636 | ||||||||||||||||||
Expensed transaction, development and other pursuit costs, net of recoveries | 2,711 | 1,047 | 1,095 | 1,599 | 3,806 | 1,847 | ||||||||||||||||||
Interest expense, net | 50,010 | 56,585 | 47,892 | 55,180 | 97,902 | 111,698 | ||||||||||||||||||
Loss on extinguishment of debt, net | 229 | 642 | 280 | 14,775 | 509 | 1,039 | ||||||||||||||||||
General and administrative expense | 18,965 | 15,267 | 13,700 | 15,738 | 32,665 | 29,698 | ||||||||||||||||||
Joint venture (income) loss | (197 | ) | (789 | ) | 1,060 | (2,710 | ) | 863 | (2,529 | ) | ||||||||||||||
Depreciation expense | 162,693 | 156,685 | 162,057 | 158,914 | 324,749 | 315,743 | ||||||||||||||||||
Casualty and impairment loss (gain), net | — | — | — | 826 | — | (58 | ) | |||||||||||||||||
Gain on sale of communities | (20,530 | ) | (105,201 | ) | (14,835 | ) | (242,532 | ) | (35,365 | ) | (105,201 | ) | ||||||||||||
Gain on other real estate transactions | (34 | ) | (370 | ) | (267 | ) | (9 | ) | (300 | ) | (323 | ) | ||||||||||||
NOI from real estate assets sold or held for sale | (1,495 | ) | (19,680 | ) | (2,582 | ) | (12,483 | ) | (4,077 | ) | (40,377 | ) | ||||||||||||
NOI | $ | 403,675 | $ | 378,406 | $ | 398,540 | $ | 396,783 | $ | 802,215 | $ | 746,306 | ||||||||||||
Established: | ||||||||||||||||||||||||
New England | $ | 41,907 | $ | 40,750 | $ | 41,808 | $ | 42,257 | $ | 83,715 | $ | 80,441 | ||||||||||||
Metro NY/NJ | 73,212 | 70,412 | 71,843 | 72,783 | 145,055 | 139,429 | ||||||||||||||||||
Mid-Atlantic | 51,073 | 49,917 | 51,052 | 51,543 | 102,125 | 98,772 | ||||||||||||||||||
Pacific NW | 20,605 | 19,142 | 20,210 | 20,868 | 40,815 | 37,766 | ||||||||||||||||||
No. California | 67,384 | 66,133 | 68,238 | 66,826 | 135,622 | 130,946 | ||||||||||||||||||
So. California | 72,593 | 71,482 | 72,695 | 72,320 | 145,288 | 141,082 | ||||||||||||||||||
Total Established | 326,774 | 317,836 | 325,846 | 326,597 | 652,620 | 628,436 | ||||||||||||||||||
Other Stabilized | 50,813 | 38,776 | 49,211 | 46,871 | 100,024 | 75,000 | ||||||||||||||||||
Redevelopment | 22,587 | 22,131 | 22,040 | 22,202 | 44,627 | 43,396 | ||||||||||||||||||
Development | 3,501 | (337 | ) | 1,443 | 1,113 | 4,944 | (526 | ) | ||||||||||||||||
NOI | $ | 403,675 | $ | 378,406 | $ | 398,540 | $ | 396,783 | $ | 802,215 | $ | 746,306 | ||||||||||||
TABLE 9 | ||||||||||||||||
Q2 | Q2 | YTD | YTD | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenue from real estate assets sold or held for sale | $ | 2,591 | $ | 30,024 | $ | 7,193 | $ | 61,857 | ||||||||
Operating expenses from real estate assets sold or held for sale | (1,096 | ) | (10,344 | ) | (3,116 | ) | (21,480 | ) | ||||||||
NOI from real estate assets sold or held for sale | $ | 1,495 | $ | 19,680 | $ | 4,077 | $ | 40,377 | ||||||||
TABLE 10 | ||||||||
Low Range | High Range | |||||||
Projected EPS (diluted) - Full Year 2019 | $ | 5.78 | $ | 5.98 | ||||
Depreciation (real estate related) | 4.62 | 4.82 | ||||||
Gain on sale of communities | (1.27 | ) | (1.47 | ) | ||||
Projected FFO per share (diluted) - Full Year 2019 | 9.13 | 9.33 | ||||||
Adjustments related to potential residential for-sale condominiums at 15 West 61st Street (1) | 0.07 | 0.07 | ||||||
Other income, development pursuit and other write-offs | 0.02 | 0.02 | ||||||
Income taxes | 0.03 | 0.03 | ||||||
Projected Core FFO per share (diluted) - Full Year 2019 | $ | 9.25 | $ | 9.45 | ||||
(1) See the full release for additional detail. | ||||||||
TABLE 11 | ||||||||||||||||
Q2 | Q2 | YTD | YTD | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Rental revenue (GAAP basis) | $ | 457,192 | $ | 443,331 | $ | 908,912 | $ | 879,977 | ||||||||
Concessions amortized | 185 | 1,199 | 390 | 2,788 | ||||||||||||
Concessions granted | (118 | ) | (148 | ) | (396 | ) | (792 | ) | ||||||||
Rental Revenue with Concessions | ||||||||||||||||
on a Cash Basis | $ | 457,259 | $ | 444,382 | $ | 908,906 | $ | 881,973 | ||||||||
% change -- GAAP revenue | 3.1 | % | 3.3 | % | ||||||||||||
% change -- cash revenue | 2.9 | % | 3.1 | % | ||||||||||||
TABLE 12 | ||||
Year to Date | ||||
NOI | ||||
NOI for Established Communities | $ | 652,620 | ||
NOI for Other Stabilized Communities | 100,024 | |||
NOI for Redevelopment Communities | 44,627 | |||
NOI for Development Communities | 4,944 | |||
NOI from real estate assets sold or held for sale | 4,077 | |||
Total NOI generated by real estate assets | 806,292 | |||
NOI on encumbered assets | 57,578 | |||
NOI on unencumbered assets | $ | 748,714 | ||
Unencumbered NOI | 93 | % | ||
Q2 2019 Results Compared to Q2 2018 | |||||||||
Per Share (1) | |||||||||
EPS | FFO | Core FFO | |||||||
Q2 2018 per share reported results | $ | 1.84 | $ | 2.21 | $ | 2.23 | |||
Established and Redevelopment Community NOI | 0.07 | 0.07 | 0.07 | ||||||
Other Stabilized and Development Community NOI | 0.08 | 0.08 | 0.07 | ||||||
Capital markets activity | (0.07 | ) | (0.07 | ) | (0.06 | ) | |||
Overhead expense and other | (0.06 | ) | (0.06 | ) | (0.05 | ) | |||
Joint venture income | 0.01 | 0.01 | 0.01 | ||||||
Gain on sale of real estate and depreciation expense | (0.66 | ) | — | — | |||||
Q2 2019 per share reported results | $ | 1.21 | $ | 2.24 | $ | 2.27 | |||
(1) For additional detail on reconciling items between EPS, FFO and Core FFO, see Attachment 14, table 5. | |||||||||
YTD 2019 Results | |||||||||
Comparison to YTD 2018 | |||||||||
Per Share (1) | |||||||||
EPS | FFO | Core FFO | |||||||
YTD 2018 per share reported results | $ | 2.87 | $ | 4.38 | $ | 4.41 | |||
Established and Redevelopment Community NOI | 0.18 | 0.18 | 0.18 | ||||||
Other Stabilized and Development Community NOI | 0.16 | 0.16 | 0.14 | ||||||
Capital markets activity | (0.13 | ) | (0.13 | ) | (0.13 | ) | |||
Overhead expense and other | (0.07 | ) | (0.07 | ) | (0.06 | ) | |||
Joint venture income and management fees | 0.03 | 0.03 | 0.03 | ||||||
Gain on sale of real estate and depreciation expense | (0.61 | ) | — | — | |||||
YTD 2019 per share reported results | $ | 2.43 | $ | 4.55 | $ | 4.57 | |||
(1) For additional detail on reconciling items between EPS, FFO and Core FFO, see Attachment 14, table 5. | |||||||||
Q2 2019 Compared to Q2 2018 | ||||||||||||
Rental Revenue (1)(2) | Opex (2)(3) | NOI | % of NOI (4) | |||||||||
New England | 2.8 | % | 2.6 | % | 2.8 | % | 14.3 | % | ||||
Metro NY/NJ | 3.1 | % | 1.8 | % | 4.0 | % | 22.7 | % | ||||
Mid-Atlantic | 2.8 | % | 4.0 | % | 2.3 | % | 15.9 | % | ||||
Pacific NW | 4.8 | % | (1.7 | )% | 7.6 | % | 5.7 | % | ||||
No. California | 3.2 | % | 7.7 | % | 1.9 | % | 20.6 | % | ||||
So. California | 3.1 | % | 7.5 | % | 1.6 | % | 20.8 | % | ||||
Total | 3.1 | % | 4.2 | % | 2.8 | % | 100.0 | % | ||||
(1) See Attachment 4, Quarterly Rental Revenue and Occupancy Changes, for additional detail. | ||||||||||||
(2) 2018 results have been adjusted to reflect uncollectible lease revenue as an adjustment to revenue. See Attachment 14, table 1. | ||||||||||||
(3) See Attachment 7, Operating Expenses ("Opex"), for discussion of variances. | ||||||||||||
(4) Represents % of total NOI for Q2 2019 in the presented regions, including amounts related to communities that have been sold or that are classified as held for sale. | ||||||||||||
YTD 2019 Compared to YTD 2018 | ||||||||||||
Rental Revenue (1)(2) | Opex (2)(3) | NOI | % of NOI (4) | |||||||||
New England | 3.0 | % | 1.2 | % | 4.1 | % | 14.2 | % | ||||
Metro NY/NJ | 3.1 | % | 1.5 | % | 4.0 | % | 22.4 | % | ||||
Mid-Atlantic | 3.0 | % | 2.1 | % | 3.4 | % | 16.0 | % | ||||
Pacific NW | 4.8 | % | (2.6 | )% | 8.1 | % | 5.7 | % | ||||
No. California | 3.3 | % | 2.6 | % | 3.6 | % | 20.9 | % | ||||
So. California | 3.4 | % | 4.7 | % | 3.0 | % | 20.8 | % | ||||
Total | 3.3 | % | 2.1 | % | 3.8 | % | 100.0 | % | ||||
(1) See Attachment 6, YTD Rental Revenue and Occupancy Changes, for additional detail. | ||||||||||||
(2) 2018 results have been adjusted to reflect uncollectible lease revenue as an adjustment to revenue. See Attachment 14, table 1. | ||||||||||||
(3) See Attachment 7, Operating Expenses ("Opex"), for discussion of variances. | ||||||||||||
(4) Represents % of total NOI for YTD 2019 in the presented regions, including amounts related to communities that have been sold or that are classified as held for sale. | ||||||||||||
• | Avalon Brea Place, located in Brea, CA; |
• | Avalon Foundry Row, located in Owings Mill, MD; and |
• | Avalon Marlborough II, located in Marlborough, MA. |
• | The Company issued $450,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds of $446,877,000. The notes mature in June 2029 and were issued with a 3.30% coupon. The effective interest rate of the notes is 3.66%, including the impact of an interest rate hedge and offering costs. |
• | The Company repaid an aggregate $47,217,000 principal amount of mortgage notes secured by one operating community at par at the scheduled maturity date, of which $13,363,000 was a 2.99% fixed rate mortgage note and $33,854,000 was a variable rate mortgage note. |
• | The Company repaid an aggregate $84,835,000 principal amount of variable rate mortgage notes secured by four operating communities at par in advance of their June 2025 maturity date. The Company utilized $47,174,000 of restricted cash held in principal reserve funds to repay a portion of the outstanding indebtedness. |
Projected EPS, Projected FFO and Projected Core FFO Outlook (1) | ||||
Full Year 2019 | ||||
Low | High | |||
Projected EPS | $5.78 | - | $5.98 | |
Projected FFO per share | $9.13 | - | $9.33 | |
Projected Core FFO per share | $9.25 | - | $9.45 | |
(1) See Attachment 14, table 10, for reconciliations of Projected FFO per share and Projected Core FFO per share to Projected EPS. | ||||
July 2019 Full Year Outlook Comparison | |||||||||
to February 2019 Full Year Outlook | |||||||||
Per Share | |||||||||
EPS | FFO | Core FFO | |||||||
Projected per share - February 2019 outlook (1) | $ | 5.43 | $ | 9.25 | $ | 9.30 | |||
Established and Redevelopment Community NOI | — | — | — | ||||||
Other Stabilized and Development Community NOI | (0.06 | ) | (0.06 | ) | (0.02 | ) | |||
Capital markets activity | 0.09 | 0.09 | 0.08 | ||||||
Overhead expense, joint venture income and other | (0.05 | ) | (0.05 | ) | (0.01 | ) | |||
Gain on sale of real estate and depreciation expense | 0.47 | — | — | ||||||
Projected per share - July 2019 outlook (1) | $ | 5.88 | $ | 9.23 | $ | 9.35 | |||
(1) The mid-point of the Company's outlook. | |||||||||
Company Profile | ||
Condensed Consolidated Operating Information........................................................................................................... | Attachment 1 | |
Condensed Consolidated Balance Sheets.................................................................................................................... | Attachment 2 | |
Sequential Operating Information by Business Segment.............................................................................................. | Attachment 3 | |
Market Profile - Established Communities | ||
Quarterly Rental Revenue and Occupancy Changes.................................................................................................... | Attachment 4 | |
Sequential Quarterly Rental Revenue and Occupancy Changes.................................................................................. | Attachment 5 | |
Year to Date Rental Revenue and Occupancy Changes............................................................................................... | Attachment 6 | |
Operating Expenses ("Opex")........................................................................................................................................ | Attachment 7 | |
Development, Joint Venture and Debt Profile | ||
Expensed Community Maintenance Costs and Capitalized Community Expenditures................................................. | Attachment 8 | |
Development Communities............................................................................................................................................ | Attachment 9 | |
Future Development...................................................................................................................................................... | Attachment 10 | |
Unconsolidated Real Estate Investments...................................................................................................................... | Attachment 11 | |
Debt Structure and Select Debt Metrics......................................................................................................................... | Attachment 12 | |
Financial Outlook | ||
2019 Financial Outlook.................................................................................................................................................. | Attachment 13 | |
Definitions and Reconciliations | ||
Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms................................................... | Attachment 14 |
Q2 | Q2 | YTD | YTD | |||||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | |||||||||||||||||
Revenue: | ||||||||||||||||||||||
Rental and other income (1) | $ | 576,149 | $ | 568,285 | 1.4 | % | $ | 1,141,194 | $ | 1,128,191 | 1.2 | % | ||||||||||
Management, development and other fees | 1,114 | 954 | 16.8 | % | 2,252 | 1,841 | 22.3 | % | ||||||||||||||
Total | 577,263 | 569,239 | 1.4 | % | 1,143,446 | 1,130,032 | 1.2 | % | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||
Direct property operating expenses, excluding property taxes (1) | 108,777 | 110,193 | (1.3 | )% | 211,362 | 221,600 | (4.6 | )% | ||||||||||||||
Property taxes | 62,187 | 59,994 | 3.7 | % | 123,516 | 119,891 | 3.0 | % | ||||||||||||||
Property management and other indirect operating expenses | 24,147 | 20,643 | 17.0 | % | 45,016 | 40,494 | 11.2 | % | ||||||||||||||
Total operating expenses | 195,111 | 190,830 | 2.2 | % | 379,894 | 381,985 | (0.5 | )% | ||||||||||||||
Interest expense, net | (50,010 | ) | (56,585 | ) | (11.6 | )% | (97,902 | ) | (111,698 | ) | (12.4 | )% | ||||||||||
Loss on extinguishment of debt, net | (229 | ) | (642 | ) | (64.3 | )% | (509 | ) | (1,039 | ) | (51.0 | )% | ||||||||||
General and administrative expense | (18,965 | ) | (15,267 | ) | 24.2 | % | (32,665 | ) | (29,698 | ) | 10.0 | % | ||||||||||
Joint venture income (loss) (2) | 197 | 789 | (75.0 | )% | (863 | ) | 2,529 | N/A | ||||||||||||||
Expensed transaction, development and other pursuit costs, net of recoveries | (2,711 | ) | (1,047 | ) | 158.9 | % | (3,806 | ) | (1,847 | ) | 106.1 | % | ||||||||||
Depreciation expense | (162,693 | ) | (156,685 | ) | 3.8 | % | (324,749 | ) | (315,743 | ) | 2.9 | % | ||||||||||
Casualty and impairment gain, net | — | — | — | % | — | 58 | (100.0 | )% | ||||||||||||||
Gain on sale of communities | 20,530 | 105,201 | (80.5 | )% | 35,365 | 105,201 | (66.4 | )% | ||||||||||||||
Gain on other real estate transactions | 34 | 370 | (90.8 | )% | 300 | 323 | (7.1 | )% | ||||||||||||||
Net income | 168,305 | 254,543 | (33.9 | )% | 338,723 | 396,133 | (14.5 | )% | ||||||||||||||
Net (income) loss attributable to noncontrolling interests | (24 | ) | 119 | N/A | (76 | ) | 172 | N/A | ||||||||||||||
Net income attributable to common stockholders | $ | 168,281 | $ | 254,662 | (33.9 | )% | $ | 338,647 | $ | 396,305 | (14.5 | )% | ||||||||||
Net income attributable to common stockholders per common share - basic | $ | 1.21 | $ | 1.84 | (34.2 | )% | $ | 2.43 | $ | 2.87 | (15.3 | )% | ||||||||||
Net income attributable to common stockholders per common share - diluted | $ | 1.21 | $ | 1.84 | (34.2 | )% | $ | 2.43 | $ | 2.87 | (15.3 | )% | ||||||||||
FFO (3) | $ | 312,593 | $ | 305,761 | 2.2 | % | $ | 632,881 | $ | 605,898 | 4.5 | % | ||||||||||
Per common share - diluted | $ | 2.24 | $ | 2.21 | 1.4 | % | $ | 4.55 | $ | 4.38 | 3.9 | % | ||||||||||
Core FFO (3) | $ | 316,522 | $ | 307,775 | 2.8 | % | $ | 636,398 | $ | 609,571 | 4.4 | % | ||||||||||
Per common share - diluted | $ | 2.27 | $ | 2.23 | 1.8 | % | $ | 4.57 | $ | 4.41 | 3.6 | % | ||||||||||
Dividends declared - common | $ | 212,549 | $ | 203,181 | 4.6 | % | $ | 424,715 | $ | 406,347 | 4.5 | % | ||||||||||
Per common share | $ | 1.52 | $ | 1.47 | 3.4 | % | $ | 3.04 | $ | 2.94 | 3.4 | % | ||||||||||
Average shares and participating securities outstanding - basic | 139,473,842 | 138,234,894 | 0.9 | % | 139,108,405 | 138,209,563 | 0.7 | % | ||||||||||||||
Average shares outstanding - diluted | 139,618,231 | 138,215,010 | 1.0 | % | 139,227,376 | 138,184,295 | 0.8 | % | ||||||||||||||
Total outstanding common shares and operating partnership units | 139,664,057 | 138,225,759 | 1.0 | % | 139,664,057 | 138,225,759 | 1.0 | % |
(1) | Historically, the Company presented charges related to uncollectible lease revenue in operating expenses. With the Company’s adoption of ASU 2016-02, Leases, the Company is presenting such charges as an adjustment to revenue in its consolidated GAAP financial statements on a prospective basis, beginning January 1, 2019. |
(2) | Joint venture income (loss) includes amounts related to disposition activity as well as amounts earned for the Company's promoted interest. |
(3) | See Attachment 14 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
Real estate | $ | 20,883,465 | $ | 20,424,325 | ||||
Less accumulated depreciation | (4,872,896 | ) | (4,601,447 | ) | ||||
Net operating real estate | 16,010,569 | 15,822,878 | ||||||
Construction in progress, including land | 1,939,808 | 1,768,132 | ||||||
Land held for development | 18,606 | 84,712 | ||||||
Real estate assets held for sale, net | 40,461 | 55,208 | ||||||
Total real estate, net | 18,009,444 | 17,730,930 | ||||||
Cash and cash equivalents | 243,576 | 91,659 | ||||||
Cash in escrow | 86,468 | 126,205 | ||||||
Resident security deposits | 35,084 | 31,816 | ||||||
Investments in unconsolidated real estate entities | 208,519 | 217,432 | ||||||
Other assets | 349,484 | 182,158 | ||||||
Total assets | $ | 18,932,575 | $ | 18,380,200 | ||||
Unsecured notes, net | $ | 6,355,132 | $ | 5,905,993 | ||||
Unsecured credit facility | — | — | ||||||
Notes payable, net | 997,085 | 1,134,270 | ||||||
Resident security deposits | 63,183 | 58,415 | ||||||
Other liabilities | 763,307 | 645,672 | ||||||
Total liabilities | 8,178,707 | 7,744,350 | ||||||
Redeemable noncontrolling interests | 3,338 | 3,244 | ||||||
Equity | 10,750,530 | 10,632,606 | ||||||
Total liabilities and equity | $ | 18,932,575 | $ | 18,380,200 |
Total | Quarter Ended | Quarter Ended | Quarter Ended | ||||||||||||
Apartment | June | March | December | ||||||||||||
Homes | 30, 2019 | 31, 2019 | 31, 2018 | ||||||||||||
RENTAL REVENUE (2)(3) | |||||||||||||||
Established | 59,900 | $ | 457,192 | $ | 451,720 | $ | 451,219 | ||||||||
Other Stabilized (4) | 10,247 | 75,452 | 72,263 | 69,547 | |||||||||||
Redevelopment | 4,249 | 32,642 | 31,808 | 31,939 | |||||||||||
Development | 7,823 | 7,418 | 3,767 | 2,277 | |||||||||||
Total Consolidated Communities | 82,219 | $ | 572,704 | $ | 559,558 | $ | 554,982 | ||||||||
OPERATING EXPENSE (3) | |||||||||||||||
Established | $ | 131,025 | $ | 126,340 | $ | 124,954 | |||||||||
Other Stabilized (4) | 24,868 | 23,457 | 22,760 | ||||||||||||
Redevelopment | 10,055 | 9,770 | 9,738 | ||||||||||||
Development | 3,920 | 2,327 | 1,165 | ||||||||||||
Total Consolidated Communities | $ | 169,868 | $ | 161,894 | $ | 158,617 | |||||||||
NOI (5) | |||||||||||||||
Established | $ | 326,774 | $ | 325,846 | $ | 326,597 | |||||||||
Other Stabilized (4) | 50,813 | 49,211 | 46,871 | ||||||||||||
Redevelopment | 22,587 | 22,040 | 22,202 | ||||||||||||
Development | 3,501 | 1,443 | 1,113 | ||||||||||||
Total Consolidated Communities | $ | 403,675 | $ | 398,540 | $ | 396,783 | |||||||||
AVERAGE REVENUE PER OCCUPIED HOME (6) | |||||||||||||||
Established | $ | 2,647 | $ | 2,619 | $ | 2,614 | |||||||||
Other Stabilized (4) | $ | 2,599 | $ | 2,559 | $ | 2,553 | |||||||||
Redevelopment | $ | 2,697 | $ | 2,661 | $ | 2,655 | |||||||||
ECONOMIC OCCUPANCY (6) | |||||||||||||||
Established | 96.1 | % | 96.0 | % | 96.1 | % | |||||||||
Other Stabilized (4) | 94.7 | % | 94.4 | % | 94.5 | % | |||||||||
Redevelopment | 94.9 | % | 93.8 | % | 94.4 | % | |||||||||
ESTABLISHED COMMUNITIES TURNOVER (7) | |||||||||||||||
Current year period / Prior year period | 56.4% / 58.1% | 41.5% / 44.2% | 42.4% / 45.2% | ||||||||||||
Current year period YTD / Prior year period YTD | 49.0% / 51.1% | 53.0% / 53.0% |
(1) | Includes consolidated communities and excludes amounts related to communities that have been sold or that are classified as held for sale. |
(2) | Rental revenue excludes non-qualified REIT income and business interruption insurance proceeds. |
(3) | Q4 2018 results have been adjusted to reflect uncollectible lease revenue as a reduction of revenue for comparable presentation to the Q1 and Q2 2019 results. See Attachment 14, table 2, for additional detail and reconciliations. |
(4) | Results for these communities for quarters prior to January 1, 2019 may reflect community operations prior to stabilization, including periods of lease-up, such that occupancy levels are below what would be considered stabilized. |
(5) | See Attachment 14 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
(6) | For per home rent projections and Economic Occupancy for Development Communities currently under construction and/or completed in Q2 2019, see Attachment 9 - Development Communities. |
(7) | Turnover represents the annualized number of units turned over during the period, divided by the total number of apartment homes for Established Communities for the respective reporting period. |
ESTABLISHED COMMUNITIES LIKE-TERM EFFECTIVE RENT CHANGE (5) | ||||
Q2 2019 | Q2 2018 | |||
New England | 3.6% | 3.8% | ||
Metro NY/NJ | 3.1% | 2.7% | ||
Mid-Atlantic | 3.0% | 1.9% | ||
Pacific NW | 4.1% | 3.9% | ||
No. California | 3.8% | 4.0% | ||
So. California | 3.2% | 3.3% | ||
Total | 3.3% | 3.2% | ||
Apartment Homes | Average Rental Rates (2) | Economic Occupancy | Rental Revenue ($000s) | |||||||||||||||||||||||||||||||||||
% Change incl. Redev (3) | ||||||||||||||||||||||||||||||||||||||
Q2 19 | Q2 18 | % Change | Q2 19 | Q2 18 | % Change | Q2 19 | Q2 18 | % Change | ||||||||||||||||||||||||||||||
New England | ||||||||||||||||||||||||||||||||||||||
Boston, MA | 7,201 | $ | 2,653 | $ | 2,563 | 3.5 | % | 95.4 | % | 95.8 | % | (0.4 | )% | $ | 54,690 | $ | 53,033 | 3.1 | % | 3.5 | % | |||||||||||||||||
Fairfield, CT | 1,371 | 2,320 | 2,292 | 1.2 | % | 96.5 | % | 97.0 | % | (0.5 | )% | 9,207 | 9,145 | 0.7 | % | 1.7 | % | |||||||||||||||||||||
New England | 8,572 | 2,600 | 2,520 | 3.2 | % | 95.6 | % | 96.0 | % | (0.4 | )% | 63,897 | 62,178 | 2.8 | % | 3.2 | % | |||||||||||||||||||||
Metro NY/NJ | ||||||||||||||||||||||||||||||||||||||
New York City, NY | 3,058 | 3,770 | 3,653 | 3.2 | % | 96.3 | % | 95.6 | % | 0.7 | % | 33,306 | 32,053 | 3.9 | % | 3.5 | % | |||||||||||||||||||||
New York - Suburban | 3,533 | 3,245 | 3,126 | 3.8 | % | 96.1 | % | 96.5 | % | (0.4 | )% | 33,060 | 31,974 | 3.4 | % | 3.4 | % | |||||||||||||||||||||
New Jersey | 4,872 | 2,578 | 2,533 | 1.8 | % | 96.6 | % | 96.3 | % | 0.3 | % | 36,404 | 35,668 | 2.1 | % | 2.4 | % | |||||||||||||||||||||
Metro NY/NJ | 11,463 | 3,101 | 3,016 | 2.8 | % | 96.4 | % | 96.1 | % | 0.3 | % | 102,770 | 99,695 | 3.1 | % | 3.1 | % | |||||||||||||||||||||
Mid-Atlantic | ||||||||||||||||||||||||||||||||||||||
Washington Metro/Baltimore, MD | 11,232 | 2,249 | 2,200 | 2.2 | % | 96.4 | % | 95.8 | % | 0.6 | % | 73,038 | 71,027 | 2.8 | % | 2.8 | % | |||||||||||||||||||||
Mid-Atlantic | 11,232 | 2,249 | 2,200 | 2.2 | % | 96.4 | % | 95.8 | % | 0.6 | % | 73,038 | 71,027 | 2.8 | % | 2.8 | % | |||||||||||||||||||||
Pacific Northwest | ||||||||||||||||||||||||||||||||||||||
Seattle, WA | 4,116 | 2,361 | 2,253 | 4.8 | % | 96.4 | % | 96.4 | % | 0.0 | % | 28,110 | 26,830 | 4.8 | % | 4.5 | % | |||||||||||||||||||||
Pacific Northwest | 4,116 | 2,361 | 2,253 | 4.8 | % | 96.4 | % | 96.4 | % | 0.0 | % | 28,110 | 26,830 | 4.8 | % | 4.5 | % | |||||||||||||||||||||
Northern California | ||||||||||||||||||||||||||||||||||||||
San Jose, CA | 3,535 | 3,149 | 2,992 | 5.2 | % | 96.5 | % | 97.4 | % | (0.9 | )% | 32,217 | 30,879 | 4.3 | % | 4.4 | % | |||||||||||||||||||||
Oakland-East Bay, CA | 2,944 | 2,582 | 2,547 | 1.4 | % | 96.2 | % | 96.5 | % | (0.3 | )% | 21,945 | 21,714 | 1.1 | % | 1.8 | % | |||||||||||||||||||||
San Francisco, CA | 3,349 | 3,536 | 3,392 | 4.2 | % | 95.9 | % | 96.6 | % | (0.7 | )% | 34,059 | 32,902 | 3.5 | % | 3.5 | % | |||||||||||||||||||||
Northern California | 9,828 | 3,111 | 2,993 | 3.9 | % | 96.2 | % | 96.9 | % | (0.7 | )% | 88,221 | 85,495 | 3.2 | % | 3.3 | % | |||||||||||||||||||||
Southern California | ||||||||||||||||||||||||||||||||||||||
Los Angeles, CA | 9,802 | 2,491 | 2,399 | 3.8 | % | 95.8 | % | 96.4 | % | (0.6 | )% | 70,159 | 67,997 | 3.2 | % | 4.2 | % | |||||||||||||||||||||
Orange County, CA | 2,821 | 2,210 | 2,148 | 2.9 | % | 96.3 | % | 95.7 | % | 0.6 | % | 18,009 | 17,398 | 3.5 | % | 1.8 | % | |||||||||||||||||||||
San Diego, CA | 2,066 | 2,191 | 2,131 | 2.8 | % | 95.7 | % | 96.3 | % | (0.6 | )% | 12,988 | 12,711 | 2.2 | % | 2.2 | % | |||||||||||||||||||||
Southern California | 14,689 | 2,395 | 2,313 | 3.5 | % | 95.9 | % | 96.3 | % | (0.4 | )% | 101,156 | 98,106 | 3.1 | % | 3.6 | % | |||||||||||||||||||||
Total Established | 59,900 | $ | 2,647 | $ | 2,564 | 3.2 | % | 96.1 | % | 96.2 | % | (0.1 | )% | $ | 457,192 | $ | 443,331 | 3.1 | % | (4) | 3.3 | % |
(1) | Established Communities are communities with Stabilized Operations as of January 1, 2018 such that a comparison of Q2 2018 to Q2 2019 is meaningful. Q2 2018 operating results for Established Communities have been adjusted to reflect uncollectible lease revenue as a reduction of revenue for comparable presentation to Q2 2019 operating results. See Attachment 14, table 1, for additional detail and a reconciliation. |
(2) | Reflects the effect of concessions amortized over the average lease term. |
(3) | Represents the change in rental revenue if the Company were to include planned, current and previously completed Redevelopment Communities, excluding those with operations impacted by a casualty loss, as part of its Established Communities portfolio. |
(4) | With concessions reflected on a cash basis, rental revenue from Established Communities increased 2.9% from Q2 2018 to Q2 2019. See Attachment 14, table 11, for additional detail and a reconciliation. With uncollectible lease revenue included as a component of operating expenses instead of as an adjustment to revenue, rental revenue from Established Communities would have remained consistent with an increase of 3.1%. See Attachment 14, table 1, for additional detail and a reconciliation. |
Apartment Homes | Average Rental Rates (2) | Economic Occupancy | Rental Revenue ($000s) | |||||||||||||||||||||||||||||||||||
% Change incl. Redev (3) | ||||||||||||||||||||||||||||||||||||||
Q2 19 | Q1 19 | % Change | Q2 19 | Q1 19 | % Change | Q2 19 | Q1 19 | % Change | ||||||||||||||||||||||||||||||
New England | ||||||||||||||||||||||||||||||||||||||
Boston, MA | 7,201 | $ | 2,653 | $ | 2,633 | 0.8 | % | 95.4 | % | 95.2 | % | 0.2 | % | $ | 54,690 | $ | 54,131 | 1.0 | % | 1.1 | % | |||||||||||||||||
Fairfield, CT | 1,371 | 2,320 | 2,314 | 0.3 | % | 96.5 | % | 96.7 | % | (0.2 | )% | 9,207 | 9,201 | 0.1 | % | 0.9 | % | |||||||||||||||||||||
New England | 8,572 | 2,600 | 2,582 | 0.7 | % | 95.6 | % | 95.4 | % | 0.2 | % | 63,897 | 63,332 | 0.9 | % | 1.1 | % | |||||||||||||||||||||
Metro NY/NJ | ||||||||||||||||||||||||||||||||||||||
New York City, NY | 3,058 | 3,770 | 3,745 | 0.7 | % | 96.3 | % | 95.5 | % | 0.8 | % | 33,306 | 32,795 | 1.6 | % | 1.0 | % | |||||||||||||||||||||
New York - Suburban | 3,533 | 3,245 | 3,205 | 1.2 | % | 96.1 | % | 95.3 | % | 0.8 | % | 33,060 | 32,368 | 2.1 | % | 2.0 | % | |||||||||||||||||||||
New Jersey | 4,872 | 2,578 | 2,535 | 1.7 | % | 96.6 | % | 96.9 | % | (0.3 | )% | 36,404 | 35,900 | 1.4 | % | 1.6 | % | |||||||||||||||||||||
Metro NY/NJ | 11,463 | 3,101 | 3,064 | 1.2 | % | 96.4 | % | 95.9 | % | 0.5 | % | 102,770 | 101,063 | 1.7 | % | 1.6 | % | |||||||||||||||||||||
Mid-Atlantic | ||||||||||||||||||||||||||||||||||||||
Washington Metro/Baltimore, MD | 11,232 | 2,249 | 2,218 | 1.4 | % | 96.4 | % | 96.3 | % | 0.1 | % | 73,038 | 71,950 | 1.5 | % | 1.7 | % | |||||||||||||||||||||
Mid-Atlantic | 11,232 | 2,249 | 2,218 | 1.4 | % | 96.4 | % | 96.3 | % | 0.1 | % | 73,038 | 71,950 | 1.5 | % | 1.7 | % | |||||||||||||||||||||
Pacific Northwest | ||||||||||||||||||||||||||||||||||||||
Seattle, WA | 4,116 | 2,361 | 2,327 | 1.5 | % | 96.4 | % | 96.4 | % | 0.0 | % | 28,110 | 27,696 | 1.5 | % | 1.7 | % | |||||||||||||||||||||
Pacific Northwest | 4,116 | 2,361 | 2,327 | 1.5 | % | 96.4 | % | 96.4 | % | 0.0 | % | 28,110 | 27,696 | 1.5 | % | 1.7 | % | |||||||||||||||||||||
Northern California | ||||||||||||||||||||||||||||||||||||||
San Jose, CA | 3,535 | 3,149 | 3,098 | 1.6 | % | 96.5 | % | 96.5 | % | 0.0 | % | 32,217 | 31,714 | 1.6 | % | 1.5 | % | |||||||||||||||||||||
Oakland-East Bay, CA | 2,944 | 2,582 | 2,572 | 0.4 | % | 96.2 | % | 96.3 | % | (0.1 | )% | 21,945 | 21,871 | 0.3 | % | 0.3 | % | |||||||||||||||||||||
San Francisco, CA | 3,349 | 3,536 | 3,494 | 1.2 | % | 95.9 | % | 96.0 | % | (0.1 | )% | 34,059 | 33,684 | 1.1 | % | 1.1 | % | |||||||||||||||||||||
Northern California | 9,828 | 3,111 | 3,075 | 1.2 | % | 96.2 | % | 96.3 | % | (0.1 | )% | 88,221 | 87,269 | 1.1 | % | 1.0 | % | |||||||||||||||||||||
Southern California | ||||||||||||||||||||||||||||||||||||||
Los Angeles, CA | 9,802 | 2,491 | 2,472 | 0.8 | % | 95.8 | % | 95.8 | % | 0.0 | % | 70,159 | 69,641 | 0.7 | % | 1.4 | % | |||||||||||||||||||||
Orange County, CA | 2,821 | 2,210 | 2,191 | 0.9 | % | 96.3 | % | 96.7 | % | (0.4 | )% | 18,009 | 17,927 | 0.5 | % | 0.7 | % | |||||||||||||||||||||
San Diego, CA | 2,066 | 2,191 | 2,176 | 0.7 | % | 95.7 | % | 95.2 | % | 0.5 | % | 12,988 | 12,842 | 1.1 | % | 1.1 | % | |||||||||||||||||||||
Southern California | 14,689 | 2,395 | 2,376 | 0.8 | % | 95.9 | % | 95.9 | % | 0.0 | % | 101,156 | 100,410 | 0.7 | % | 1.2 | % | |||||||||||||||||||||
Total Established | 59,900 | $ | 2,647 | $ | 2,619 | 1.1 | % | 96.1 | % | 96.0 | % | 0.1 | % | $ | 457,192 | $ | 451,720 | 1.2 | % | (4) | 1.3 | % |
(1) | Established Communities are communities with Stabilized Operations as of January 1, 2018. |
(2) | Reflects the effect of concessions amortized over the average lease term. |
(3) | Represents the change in rental revenue if the Company were to include planned, current and previously completed Redevelopment Communities, excluding those with operations impacted by a casualty loss, as part of its Established Communities portfolio. |
(4) | With uncollectible lease revenue included as a component of operating expenses instead of as an adjustment to revenue, rental revenue from Established Communities would have increased 1.3%. See Attachment 14, table 1, for additional detail and a reconciliation. |
Apartment Homes | Average Rental Rates (2) | Economic Occupancy | Rental Revenue ($000s) | |||||||||||||||||||||||||||||||||||
Year to Date 2019 | Year to Date 2018 | % Change | Year to Date 2019 | Year to Date 2018 | % Change | Year to Date 2019 | Year to Date 2018 | % Change | % Change incl. Redev (3) | |||||||||||||||||||||||||||||
New England | ||||||||||||||||||||||||||||||||||||||
Boston, MA | 7,201 | $ | 2,643 | $ | 2,553 | 3.5 | % | 95.3 | % | 95.5 | % | (0.2 | )% | $ | 108,820 | $ | 105,333 | 3.3 | % | 3.5 | % | |||||||||||||||||
Fairfield, CT | 1,371 | 2,317 | 2,280 | 1.6 | % | 96.6 | % | 96.9 | % | (0.3 | )% | 18,409 | 18,172 | 1.3 | % | 1.6 | % | |||||||||||||||||||||
New England | 8,572 | 2,591 | 2,510 | 3.2 | % | 95.5 | % | 95.7 | % | (0.2 | )% | 127,229 | 123,505 | 3.0 | % | 3.2 | % | |||||||||||||||||||||
Metro NY/NJ | ||||||||||||||||||||||||||||||||||||||
New York City, NY | 3,058 | 3,757 | 3,637 | 3.3 | % | 95.9 | % | 95.6 | % | 0.3 | % | 66,101 | 63,820 | 3.6 | % | 3.1 | % | |||||||||||||||||||||
New York - Suburban | 3,533 | 3,225 | 3,096 | 4.2 | % | 95.7 | % | 96.3 | % | (0.6 | )% | 65,428 | 63,181 | 3.6 | % | 3.7 | % | |||||||||||||||||||||
New Jersey | 4,872 | 2,557 | 2,511 | 1.8 | % | 96.8 | % | 96.3 | % | 0.5 | % | 72,304 | 70,670 | 2.3 | % | 2.6 | % | |||||||||||||||||||||
Metro NY/NJ | 11,463 | 3,083 | 2,991 | 3.1 | % | 96.1 | % | 96.1 | % | 0.0 | % | 203,833 | 197,671 | 3.1 | % | 3.1 | % | |||||||||||||||||||||
Mid-Atlantic | ||||||||||||||||||||||||||||||||||||||
Washington Metro/Baltimore, MD | 11,232 | 2,234 | 2,181 | 2.4 | % | 96.3 | % | 95.7 | % | 0.6 | % | 144,988 | 140,737 | 3.0 | % | 2.9 | % | |||||||||||||||||||||
Mid-Atlantic | 11,232 | 2,234 | 2,181 | 2.4 | % | 96.3 | % | 95.7 | % | 0.6 | % | 144,988 | 140,737 | 3.0 | % | 2.9 | % | |||||||||||||||||||||
Pacific Northwest | ||||||||||||||||||||||||||||||||||||||
Seattle, WA | 4,116 | 2,344 | 2,235 | 4.9 | % | 96.4 | % | 96.5 | % | (0.1 | )% | 55,807 | 53,255 | 4.8 | % | 4.4 | % | |||||||||||||||||||||
Pacific Northwest | 4,116 | 2,344 | 2,235 | 4.9 | % | 96.4 | % | 96.5 | % | (0.1 | )% | 55,807 | 53,255 | 4.8 | % | 4.4 | % | |||||||||||||||||||||
Northern California | ||||||||||||||||||||||||||||||||||||||
San Jose, CA | 3,535 | 3,123 | 2,973 | 5.0 | % | 96.5 | % | 97.2 | % | (0.7 | )% | 63,931 | 61,283 | 4.3 | % | 4.6 | % | |||||||||||||||||||||
Oakland-East Bay, CA | 2,944 | 2,577 | 2,536 | 1.6 | % | 96.3 | % | 96.5 | % | (0.2 | )% | 43,816 | 43,216 | 1.4 | % | 2.0 | % | |||||||||||||||||||||
San Francisco, CA | 3,349 | 3,515 | 3,369 | 4.3 | % | 95.9 | % | 96.5 | % | (0.6 | )% | 67,742 | 65,356 | 3.7 | % | 3.7 | % | |||||||||||||||||||||
Northern California | 9,828 | 3,093 | 2,976 | 3.9 | % | 96.2 | % | 96.8 | % | (0.6 | )% | 175,489 | 169,855 | 3.3 | % | 3.5 | % | |||||||||||||||||||||
Southern California | ||||||||||||||||||||||||||||||||||||||
Los Angeles, CA | 9,802 | 2,481 | 2,382 | 4.2 | % | 95.8 | % | 96.3 | % | (0.5 | )% | 139,800 | 134,876 | 3.7 | % | 4.2 | % | |||||||||||||||||||||
Orange County, CA | 2,821 | 2,201 | 2,145 | 2.6 | % | 96.5 | % | 95.9 | % | 0.6 | % | 35,936 | 34,825 | 3.2 | % | 1.6 | % | |||||||||||||||||||||
San Diego, CA | 2,066 | 2,183 | 2,119 | 3.0 | % | 95.4 | % | 96.1 | % | (0.7 | )% | 25,830 | 25,253 | 2.3 | % | 2.3 | % | |||||||||||||||||||||
Southern California | 14,689 | 2,385 | 2,300 | 3.7 | % | 95.9 | % | 96.2 | % | (0.3 | )% | 201,566 | 194,954 | 3.4 | % | 3.5 | % | |||||||||||||||||||||
Total Established | 59,900 | $ | 2,633 | $ | 2,545 | 3.5 | % | 96.0 | % | 96.2 | % | (0.2 | )% | $ | 908,912 | $ | 879,977 | 3.3 | % | (4) | 3.3 | % |
(1) | Established Communities are communities with Stabilized Operations as of January 1, 2018 such that a comparison of year to date 2018 to year to date 2019 is meaningful. Year to date 2018 operating results for Established Communities have been adjusted to reflect uncollectible lease revenue as a reduction of revenue for comparable presentation to year to date 2019 operating results. See Attachment 14, table 1, for additional detail and a reconciliation. |
(2) | Reflects the effect of concessions amortized over the average lease term. |
(3) | Represents the change in rental revenue if the Company were to include planned, current and previously completed Redevelopment Communities, excluding those with operations impacted by a casualty loss, as part of its Established Communities portfolio. |
(4) | With concessions reflected on a cash basis, rental revenue from Established Communities increased 3.1% between years. See Attachment 14, table 11, for additional detail and a reconciliation. With uncollectible lease revenue included as a component of operating expenses instead of as an adjustment to revenue, rental revenue from Established Communities would have increased 3.1%. See Attachment 14, table 1, for additional detail and a reconciliation. |
Q2 2019 | Q2 2018 | % Change | Q2 2019 % of Total Opex | Year to Date 2019 | Year to Date 2018 | % Change | Year to Date 2019 % of Total Opex | |||||||||||||||||||||
Property taxes (2) | $ | 47,606 | $ | 46,406 | 2.6 | % | 36.3 | % | $ | 94,623 | $ | 93,041 | 1.7 | % | 36.8 | % | ||||||||||||
Payroll (3) | 30,629 | 28,674 | 6.8 | % | 23.4 | % | 60,358 | 59,238 | 1.9 | % | 23.5 | % | ||||||||||||||||
Repairs & maintenance (4) | 23,460 | 21,763 | 7.8 | % | 17.9 | % | 42,736 | 40,055 | 6.7 | % | 16.6 | % | ||||||||||||||||
Utilities | 10,910 | 10,920 | (0.1 | )% | 8.3 | % | 23,410 | 23,710 | (1.3 | )% | 9.1 | % | ||||||||||||||||
Office operations (5) | 10,319 | 10,209 | 1.1 | % | 7.9 | % | 20,300 | 20,475 | (0.9 | )% | 7.9 | % | ||||||||||||||||
Insurance (6) | 5,358 | 4,745 | 12.9 | % | 4.1 | % | 10,681 | 9,721 | 9.9 | % | 4.1 | % | ||||||||||||||||
Marketing (7) | 2,743 | 3,034 | (9.6 | )% | 2.1 | % | 5,259 | 5,743 | (8.4 | )% | 2.0 | % | ||||||||||||||||
Total Established Communities Operating Expenses | $ | 131,025 | $ | 125,751 | 4.2 | % | 100.0 | % | $ | 257,367 | $ | 251,983 | 2.1 | % | 100.0 | % |
(1) | Operating expenses for Established Communities exclude indirect costs for off-site corporate-level property management related expenses and other support-related expenses. For comparability purposes, Q2 and YTD 2018 results have been adjusted to present uncollectible lease revenue as a reduction of revenue. Had uncollectible lease revenue been presented as a component of office operations, total Established Communities operating expenses would have increased 4.0% and 1.5% during the three and six months ended June 30, 2019, respectively, as compared to the prior year periods. See Attachment 14, table 1, for additional detail and a reconciliation. |
(2) | Property taxes increased for the three and six months ended June 30, 2019 over the prior year periods primarily due to increased assessments in the Company's East Coast markets, partially offset by successful appeals in Metro New York/New Jersey in the current year periods and decreased tax rates in the Pacific Northwest. The increase for the six months ended June 30, 2019 is also partially offset by a successful appeal in Northern California in the current year period. |
(3) | Payroll costs increased for the three and six months ended June 30, 2019 over the prior year periods primarily due to increased benefits costs and merit increases in associate compensation, partially offset by decreased bonuses and a reduction in on-site positions. |
(4) | Repairs and maintenance increased for the three and six months ended June 30, 2019 over the prior year periods primarily due to increased repairs and maintenance projects and decreases in rebates due to timing. |
(5) | Office operations includes administrative costs, land lease expense and association and license fees. Refer to (1) above for discussion of uncollectible lease revenue. |
(6) | Insurance costs consist of premiums, expected claims activity and associated reductions from receipt of claims recoveries. The increases for the three and six months ended June 30, 2019 over the prior year periods are primarily due to increased property insurance premiums and deductibles and the timing of claims. Insurance costs can be variable due to the amounts and timing of estimated and actual claim activity and the related recoveries received. |
(7) | Marketing costs decreased for the three and six months ended June 30, 2019 from the prior year periods primarily due to a decrease in internet advertising and call center costs. The reduction in call center costs relates to the Company’s adoption of new lead management technology in Q1 2019. |
YTD 2019 Maintenance Expensed Per Home | Categorization of YTD 2019 Additional Capitalized Value (2) | ||||||||||||||||||||||||||||||||||||||
Current Communities | Apartment Homes (1) | Carpet Replacement | Other Maintenance (3) | Total | Acquisitions, Construction, Redevelopment & Dispositions (4) | NOI Enhancing (5)(6) | Asset Preservation | YTD 2019 Additional Capitalized Value | NOI Enhancing Per Home (6) | Asset Preservation Per Home | |||||||||||||||||||||||||||||
Established Communities | 59,900 | $ | 63 | $ | 1,140 | $ | 1,203 | $ | — | $ | 16,731 | $ | 32,059 | $ | 48,790 | $ | 279 | $ | 535 | ||||||||||||||||||||
Other Stabilized Communities | 10,247 | 25 | 1,165 | 1,190 | 153,163 | (7) | 92 | 1,400 | 154,655 | $ | 9 | $ | 137 | ||||||||||||||||||||||||||
Redevelopment Communities (8) | 4,249 | 41 | 1,189 | 1,230 | 42,311 | — | — | 42,311 | — | — | |||||||||||||||||||||||||||||
Development Communities (8) | 7,823 | — | 172 | 172 | 463,225 | — | — | 463,225 | — | — | |||||||||||||||||||||||||||||
Dispositions | — | — | — | — | (117,816 | ) | — | — | (117,816 | ) | — | — | |||||||||||||||||||||||||||
Total | 82,219 | $ | 51 | $ | 1,053 | $ | 1,104 | $ | 540,883 | $ | 16,823 | $ | 33,459 | $ | 591,165 | N/A | N/A |
(1) | Includes consolidated communities and excludes communities that have been sold or that are classified as held for sale. |
(2) | Policy is to capitalize expenditures for the acquisition or development of new assets or expenditures that extend the life of existing assets that will benefit the Company for periods greater than a year. |
(3) | Other maintenance includes maintenance, landscaping and redecorating costs, as well as maintenance related payroll expense. |
(4) | Includes the write-off of impaired assets and additional capitalized spend related to recognized casualty losses, if applicable. |
(5) | Includes $330 in rebates received during the six months ended June 30, 2019, primarily related to NOI Enhancing Capex incurred during 2018. |
(6) | This Attachment excludes capitalized expenditures for the retail component of communities, which the Company classifies as NOI Enhancing. Established Communities and Other Stabilized Communities exclude $837 and $306, respectively, related to retail space. |
(7) | Represents acquired communities, coupled with commitment close-outs and construction true-ups on recently constructed communities. |
(8) | Represents communities that were under construction/reconstruction during the period, including communities where construction/reconstruction has been completed. |
Other Capitalized Costs | ||||||
Interest | Overhead | |||||
Q3 2018 | $ | 16,277 | $ | 10,878 | ||
Q4 2018 | $ | 16,323 | $ | 11,917 | ||
Q1 2019 | $ | 17,589 | $ | 11,775 | ||
Q2 2019 | $ | 17,127 | $ | 12,605 | ||
Community Information | Number | Total | Schedule | % | % | % | % | ||||||||||||||||||||||||||||
of | Capital | Full Qtr | Avg Rent | Complete | Leased | Occupied | Economic | ||||||||||||||||||||||||||||
Apt | Cost | Initial | Stabilized | Per | Occ. | ||||||||||||||||||||||||||||||
Development Name | Location | Homes | (millions) | Start | Occupancy | Complete | Ops | Home | As of July 23, 2019 | Q2 '19 | |||||||||||||||||||||||||
Communities Under Construction: | |||||||||||||||||||||||||||||||||||
1. | Avalon Boonton | Boonton, NJ | 350 | $ | 92 | Q3 2016 | Q1 2019 | Q1 2020 | Q3 2020 | $ | 2,535 | 63 | % | 61 | % | 50 | % | 27 | % | ||||||||||||||||
2. | Avalon Belltown Towers (1) (2) | Seattle, WA | 274 | 147 | Q4 2016 | Q2 2019 | Q4 2019 | Q2 2020 | 3,570 | 50 | % | 15 | % | 10 | % | 2 | % | ||||||||||||||||||
3. | Avalon Teaneck | Teaneck, NJ | 248 | 73 | Q4 2016 | Q2 2019 | Q1 2020 | Q3 2020 | 2,560 | 32 | % | 38 | % | 20 | % | 3 | % | ||||||||||||||||||
4. | AVA Esterra Park | Redmond, WA | 323 | 91 | Q2 2017 | Q4 2018 | Q3 2019 | Q1 2020 | 2,165 | 82 | % | 69 | % | 63 | % | 27 | % | ||||||||||||||||||
5. | Avalon North Creek | Bothell, WA | 316 | 84 | Q4 2017 | Q2 2019 | Q1 2020 | Q3 2020 | 2,100 | 40 | % | 21 | % | 14 | % | 3 | % | ||||||||||||||||||
6. | Avalon Saugus (1) | Saugus, MA | 280 | 93 | Q2 2018 | Q2 2019 | Q1 2020 | Q3 2020 | 2,445 | 35 | % | 39 | % | 22 | % | 7 | % | ||||||||||||||||||
7. | Avalon Norwood | Norwood, MA | 198 | 61 | Q2 2018 | Q3 2019 | Q1 2020 | Q3 2020 | 2,420 | — | 25 | % | — | — | |||||||||||||||||||||
8. | Avalon Public Market | Emeryville, CA | 289 | 163 | Q4 2016 | Q3 2019 | Q1 2020 | Q3 2020 | 3,605 | — | 15 | % | — | — | |||||||||||||||||||||
9. | AVA Hollywood (1) | Hollywood, CA | 695 | 365 | Q4 2016 | Q3 2019 | Q3 2020 | Q1 2021 | 3,380 | — | — | — | — | ||||||||||||||||||||||
10. | Avalon Towson | Towson, MD | 371 | 114 | Q4 2017 | Q1 2020 | Q4 2020 | Q2 2021 | 2,065 | — | — | — | — | ||||||||||||||||||||||
11. | Avalon Yonkers | Yonkers, NY | 590 | 188 | Q4 2017 | Q3 2019 | Q1 2021 | Q2 2021 | 2,750 | — | — | — | — | ||||||||||||||||||||||
12. | Avalon Walnut Creek II | Walnut Creek, CA | 200 | 109 | Q4 2017 | Q4 2019 | Q2 2020 | Q4 2020 | 3,465 | — | — | — | — | ||||||||||||||||||||||
13. | Avalon Doral | Doral, FL | 350 | 113 | Q2 2018 | Q2 2020 | Q1 2021 | Q3 2021 | 2,275 | — | — | — | — | ||||||||||||||||||||||
14. | Avalon East Harbor | Baltimore, MD | 400 | 139 | Q3 2018 | Q4 2020 | Q3 2021 | Q1 2022 | 2,615 | — | — | — | — | ||||||||||||||||||||||
15. | Avalon Old Bridge | Old Bridge, NJ | 252 | 66 | Q3 2018 | Q1 2020 | Q4 2020 | Q1 2021 | 2,355 | — | — | — | — | ||||||||||||||||||||||
16. | Avalon Newcastle Commons II | Newcastle, WA | 293 | 106 | Q4 2018 | Q3 2020 | Q1 2021 | Q3 2021 | 2,460 | — | — | — | — | ||||||||||||||||||||||
17. | Twinbrook Station | Rockville, MD | 238 | 66 | Q4 2018 | Q3 2020 | Q1 2021 | Q3 2021 | 1,710 | — | — | — | — | ||||||||||||||||||||||
18. | Avalon Harrison (1) | Harrison, NY | 143 | 76 | Q4 2018 | Q4 2020 | Q4 2021 | Q1 2022 | 3,780 | — | — | — | — | ||||||||||||||||||||||
19. | Avalon Brea Place | Brea, CA | 653 | 290 | Q2 2019 | Q1 2021 | Q2 2022 | Q3 2022 | 2,785 | — | — | — | — | ||||||||||||||||||||||
20. | Avalon Foundry Row | Owings Mills, MD | 437 | 100 | Q2 2019 | Q1 2021 | Q1 2022 | Q3 2022 | 1,805 | — | — | — | — | ||||||||||||||||||||||
21. | Avalon Marlborough II | Marlborough, MA | 123 | 42 | Q2 2019 | Q2 2020 | Q4 2020 | Q2 2021 | 2,465 | — | — | — | — | ||||||||||||||||||||||
Communities Under Construction Subtotal / Weighted Average | |||||||||||||||||||||||||||||||||||
7,023 | $ | 2,578 | $ | 2,635 | |||||||||||||||||||||||||||||||
Communities Completed this Quarter: | |||||||||||||||||||||||||||||||||||
1. | Avalon Piscataway | Piscataway, NJ | 360 | $ | 91 | Q2 2017 | Q3 2018 | Q2 2019 | Q4 2019 | $ | 2,225 | 100 | % | 94 | % | 94 | % | 66 | % | ||||||||||||||||
Communities Completed Subtotal / Weighted Average | 360 | $ | 91 | $ | 2,225 | ||||||||||||||||||||||||||||||
Total/Weighted Average Under Construction and Completed this quarter | 7,383 | $ | 2,669 | $ | 2,615 | ||||||||||||||||||||||||||||||
Total Weighted Average Projected NOI as a % of Total Capital Cost | 6.0% | ||||||||||||||||||||||||||||||||||
Asset Cost Basis (millions) (3)(4): | |||||||||||||||||||||||||||||||||||
Total Capital Cost, under construction and completed | $ | 3,358 | |||||||||||||||||||||||||||||||||
Total Capital Cost, disbursed to date | (2,237 | ) | |||||||||||||||||||||||||||||||||
Total Capital Cost, remaining to invest | $ | 1,121 |
(1) | Developments containing at least 10,000 square feet of retail space include Avalon Belltown Towers (11,000 sf), Avalon Saugus (23,000 sf), AVA Hollywood (19,000 sf) and Avalon Harrison (27,000 sf). |
(2) | Leased and occupied metrics exclude 20% of the apartment homes, which have been leased on a temporary basis to a third-party hotel operator effective August 2019. |
(3) | Includes the communities presented and 15 West 61st Street, which contains 172 residential units and 67,000 square feet of retail space, and is expected to be developed for an estimated Total Capital Cost of $624,000,000. The Company is pursuing a potential for-sale strategy of individual condominium units for the residential portion, while the Company expects to maintain ownership of the retail. Completion of the first residential units and retail space began in Q2 2019 with full completion expected in Q4 2019. |
(4) | Includes the communities presented and one additional community with 190 apartment homes representing $65 million in Total Capital Costs which has completed construction but not yet achieved Stabilized Operations for the full quarter. Q2 2019 NOI for the communities presented on this Attachment was $1 million. Additionally, Q2 NOI for the retail portion of 15 West 61st Street was $1 million. |
DEVELOPMENT RIGHTS |
Estimated | Total Capital | |||||||||
# of Rights | Number | Cost | ||||||||
of Homes | (millions) | |||||||||
Development Rights as of 12/31/2018 | 28 | 9,769 | $ | 4,124 | ||||||
Q1 2019 | ||||||||||
Q1 Additions | 1 | 300 | $ | 82 | ||||||
Q1 Construction starts | — | — | — | |||||||
Q1 Adjustments to existing Development Rights | — | (19 | ) | (9 | ) | |||||
Development Rights as of 3/31/2019 | 29 | 10,050 | $ | 4,197 | ||||||
Q2 2019 | ||||||||||
Q2 Additions | 5 | 1,172 | $ | 358 | ||||||
Q2 Construction starts | (3 | ) | (1,213 | ) | (432 | ) | ||||
Q2 Adjustments to existing Development Rights | (3 | ) | (1,005 | ) | (281 | ) | ||||
Development Rights as of 6/30/2019 | 28 | 9,004 | $ | 3,842 | ||||||
Current Development Rights by Region as of June 30, 2019 | ||||||||||
New England | 6 | 1,135 | $ | 420 | ||||||
Metro NY/NJ | 10 | 4,364 | 1,861 | |||||||
Mid-Atlantic | — | — | — | |||||||
Pacific Northwest | 2 | 542 | 170 | |||||||
Northern California | 4 | 1,254 | 736 | |||||||
Southern California | 3 | 791 | 368 | |||||||
Denver | 3 | 918 | 287 | |||||||
28 | 9,004 | $ | 3,842 | |||||||
Current Development Rights by Classification as of June 30, 2019 | ||||||||||
Conventional | 20 | 5,613 | $ | 2,021 | ||||||
Asset Densification | 6 | 1,890 | 942 | |||||||
Public-Private Partnership | 2 | 1,501 | 879 | |||||||
28 | 9,004 | $ | 3,842 |
Select Operating Information | ||||||||||||||||||||||||||||||||||
Company | Number of | NOI (1)(2) | Disposition Gains and Other Activity (1)(3) | Debt | ||||||||||||||||||||||||||||||
Unconsolidated Real Estate | Number of | Ownership | Apartment | Q2 | YTD | Q2 | YTD | Principal | Interest | |||||||||||||||||||||||||
Investments | Communities | Percentage | Homes | 2019 | 2019 | 2019 | 2019 | Amount (1) | Rate (4) | |||||||||||||||||||||||||
NYTA MF Investors LLC | 5 | 20.0 | % | 1,301 | $ | 9,225 | $ | 17,988 | $ | — | $ | — | $ | 395,939 | 3.88 | % | ||||||||||||||||||
Archstone Multifamily Partners AC LP | 5 | 28.6 | % | 946 | 5,333 | 10,661 | — | — | 203,139 | 3.08 | % | |||||||||||||||||||||||
Multifamily Partners AC JV LP | 2 | 20.0 | % | 529 | 3,397 | 6,728 | — | — | 111,653 | (5) | 6.00 | % | ||||||||||||||||||||||
North Point II JV, LP | 1 | 55.0 | % | 265 | 1,627 | 3,112 | — | — | — | — | % | |||||||||||||||||||||||
MVP I, LLC | 1 | 25.0 | % | 313 | 2,971 | 5,846 | — | — | 103,000 | 3.24 | % | |||||||||||||||||||||||
Brandywine Apartments of Maryland, LLC | 1 | 28.7 | % | 305 | 972 | 1,738 | — | — | 21,905 | 3.40 | % | |||||||||||||||||||||||
Total Unconsolidated Real Estate Investments | 15 | 3,659 | $ | 23,525 | $ | 46,073 | $ | — | $ | — | $ | 835,636 | 3.88 | % |
(1) | NOI, outstanding indebtedness and disposition gains and other activity are presented at 100% ownership. |
(2) | NOI excludes property management fees as the Company serves as the property management company for all ventures except Brandywine Apartments of Maryland, LLC. |
(3) | Disposition gains and other activity is composed primarily of gains on disposition of unconsolidated real estate investments, of which the Company's portion is included in joint venture income as presented on Attachment 1 - Condensed Consolidated Operating Information. During the six months ended June 30, 2019 and 2018, there were no dispositions of unconsolidated real estate investments. |
(4) | Represents the weighted average interest rate as of June 30, 2019. |
(5) | Borrowing is comprised of loans made by the equity investors in the venture in proportion to their equity interests. |
DEBT COMPOSITION AND MATURITIES | ||||||||||||||||||||
Average Interest Rate (1) | Principal Amortization Payments and Maturities (2) | |||||||||||||||||||
Debt Composition | Amount | Year | Secured notes amortization and maturities | Unsecured notes maturities | Total | |||||||||||||||
Secured notes | 2019 | $ | 68,216 | $ | — | $ | 68,216 | |||||||||||||
Fixed rate | $ | 517,039 | 3.8 | % | 2020 | 149,211 | 400,000 | 549,211 | ||||||||||||
Variable rate | 497,850 | 3.5 | % | 2021 | 37,148 | 550,000 | 587,148 | |||||||||||||
Subtotal, secured notes | 1,014,889 | 3.7 | % | 2022 | 9,918 | 550,000 | 559,918 | |||||||||||||
2023 | 10,739 | 600,000 | 610,739 | |||||||||||||||||
Unsecured notes | 2024 | 11,577 | 450,000 | 461,577 | ||||||||||||||||
Fixed rate | 5,850,000 | 3.7 | % | 2025 | 12,508 | 825,000 | 837,508 | |||||||||||||
Variable rate | 550,000 | 3.3 | % | 2026 | 13,545 | 775,000 | 788,545 | |||||||||||||
Subtotal, unsecured notes | 6,400,000 | 3.7 | % | 2027 | 200,080 | 400,000 | 600,080 | |||||||||||||
2028 | 20,607 | 450,000 | 470,607 | |||||||||||||||||
Variable rate facility (3) | — | — | Thereafter | 481,340 | 1,400,000 | 1,881,340 | ||||||||||||||
Total Debt | $ | 7,414,889 | 3.7 | % | $ | 1,014,889 | $ | 6,400,000 | $ | 7,414,889 |
SELECT DEBT METRICS | ||||||||||
Net Debt-to-Core EBITDAre (4) | 4.8x | Interest Coverage (4) | 7.4x | Unencumbered NOI (4) | 93% | Weighted avg years to maturity of total debt (2) | 9.3 |
DEBT COVENANT COMPLIANCE | ||||||||||
Unsecured Line of Credit Covenants | June 30, 2019 | Requirement | ||||||||
Total Outstanding Indebtedness to Capitalization Value (5) | 27.7 | % | < | 65% | ||||||
Combined EBITDA to Combined Debt Service | 6.17x | > | 1.50x | |||||||
Unsecured Indebtedness to Unencumbered Asset Value | 22.4 | % | < | 65% | ||||||
Secured Indebtedness to Capitalization Value (5) | 3.6 | % | < | 40% | ||||||
Unsecured Senior Notes Covenants (6) | June 30, 2019 | Requirement | ||||||||
Total Outstanding Indebtedness to Total Assets (7) | 32.2 | % | < | 65% | ||||||
Secured Indebtedness to Total Assets (7) | 4.3 | % | < | 40% | ||||||
Unencumbered Assets to Unsecured Indebtedness | 330.9 | % | > | 150% | ||||||
Consolidated Income Available for Debt Service to the Annual Service Charge | 6.86x | > | 1.50x |
(1) | Rates are as of June 30, 2019 and, for secured and unsecured notes, include costs of financing such as credit enhancement fees, trustees' fees, the impact of interest rate hedges and mark-to-market adjustments. |
(2) | Excludes the Company's unsecured credit facility and any associated issuance discount, mark-to-market discounts and deferred financing costs if applicable. |
(3) | Represents amounts outstanding at June 30, 2019 under the Company's $1.75 billion unsecured credit facility. |
(4) | See Attachment 14 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
(5) | Capitalization Value represents the Company’s Combined EBITDA for operating communities that the Company has owned for at least 12 months as of June 30, 2019, capitalized at a rate of 6% per annum, plus the book value of Development Communities and real estate communities acquired. For discussion of other defined terms, see "Debt Covenant Compliance" in Attachment 14 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
(6) | The information about the Company’s unsecured senior notes covenants shows compliance with selected covenants under the Company’s 1998 Indenture, under which debt securities are outstanding with maturity dates through 2047, subject to prepayment or redemption at the Company’s election. See “Debt Covenant Compliance” in Attachment 14 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. Different covenants apply to debt securities outstanding under the Company’s 2018 Indenture. |
(7) | Total Assets represents the sum of the Company's undepreciated real estate assets and other assets, excluding accounts receivable. See "Debt Covenant Compliance" in Attachment 14 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
Key Outputs (1) | ||||
Annual 2019 | ||||
July 2019 | February 2019 | |||
Outlook | Outlook | |||
EPS | $5.78 to $5.98 | $5.18 to $5.68 | ||
Projected Growth (2) | (16.6)% | (23.0)% | ||
FFO per share | $9.13 to $9.33 | $9.00 to $9.50 | ||
Projected Growth (2) | 4.8% | 5.0% | ||
Core FFO per share | $9.25 to $9.45 | $9.05 to $9.55 | ||
Projected Growth (2) | 3.9% | 3.3% |
Assumptions | ||||
Annual 2019 | ||||
July 2019 | February 2019 | |||
Outlook | Outlook | |||
2019 Growth Assumptions - AvalonBay markets (3) | ||||
Expected job growth | 1.3% | 1.2% | ||
Expected wage growth | 3.0% | 3.5% | ||
Expected apartment deliveries | 1.9% | 2.3% | ||
2019 Established Communities assumptions: | ||||
Revenue change | 2.75% to 3.25% | 2.5% to 3.5% | ||
Operating expense change | 2.1% to 2.7% | 2.5% to 3.5% | ||
NOI change | 3.0% to 3.5% | 2.5% to 3.5% | ||
Expensed overhead (4) | $147 to $152 | $143 to $153 | ||
Capitalized interest | $60 to $64 | $55 to $65 | ||
Expected capital cost for Development Communities: | ||||
Started in 2019 (AVB share/gross) | $800 to $1,000 / $850 to $1,050 | $850 to $1,050 / $900 to $1,100 | ||
Completed in 2019 (5) | $480 | $640 | ||
2019 Projected NOI - Development Communities | $22 to $26 | $22 to $32 | ||
Key Capital Items (2) | |||||||||
July 2019 | February 2019 | ||||||||
Outlook | Outlook | ||||||||
New capital sourced from asset and potential residential for-sale condominium sales and capital markets activity | $ | 1,250 | $ | 1,000 | |||||
Capital used for development and redevelopment activity, including land | $ | 1,150 | $ | 1,325 | |||||
Capital used for acquisition activity | $ | 300 | $ | — | |||||
Capital used for debt redemptions and amortization | $ | 225 | $ | 125 | |||||
Projected decrease in cash and cash equivalents during 2019* | $ | 65 | $ | 90 | |||||
* Represents the difference between cash and cash equivalents as of December 31, 2018 of $91 and projected cash and cash equivalents as of December 31, 2019 of $0 (per the February 2019 Outlook) and $25 (per the July 2019 Outlook). | |||||||||
Core FFO Adjustments Related to Potential Residential For-Sale Condominiums at 15 West 61st Street | |||||||||
Expensed costs incurred (6) | $5 | $6 | |||||||
Potential gains on sales (7) | (3) | (8) | |||||||
Imputed carry cost (8) | 7 | 8 | |||||||
Total Core FFO adjustments | $9 | $6 | |||||||
Total Core FFO adjustments (per share, midpoint) | $0.07 | $0.04 |
(1) | See Attachment 14 for Definitions and Reconciliations of Non-GAAP Financial Measures, including the reconciliation of Projected EPS to Projected FFO per share and Projected Core FFO per share. |
(2) | Data generally represents the mid-point of management's expected ranges for 2019. |
(3) | Sources: AVB Market Research Group, Moody's Analytics, National Association for Business Economics and Axiometrics. Expected apartment deliveries reflect new market rate apartment deliveries as a percentage of existing market rate apartment stock. AVB markets exclude expansion markets (Southeast Florida and Denver). |
(4) | Includes general and administrative expense and property management overhead. |
(5) | Excludes Total Capital Cost for 15 West 61st Street of $624. |
(6) | Operating expenses incurred for potential residential for-sale condominiums includes property taxes, marketing expenses, sales staff and other operating costs. |
(7) | Reflects gain after taxes (including a $6 deferred tax liability related to future sales) and costs of sales on potential residential for-sale condominiums sold during 2019. Projected gross proceeds from sales are expected to be $70 to $80. |
(8) | Represents the imputed carry cost of potential for-sale residential condominium units where construction is complete and a potential for-sale condominium strategy is being pursued. The Company computes this adjustment by multiplying the Total Capital Cost of completed and unsold potential for-sale residential condominium units by the Company's weighted average unsecured debt rate. |
TABLE 1 | |||||||||||||||||||||||||||||
Q2 2019 | Q2 2018 | Q2 2019 to Q2 2018 % Change | Q1 2019 | Q2 2019 to Q1 2019 % Change | YTD 2019 | YTD 2018 | YTD 2019 to YTD 2018 % Change | ||||||||||||||||||||||
Total revenue, excluding uncollectible lease revenue | $ | 460,297 | $ | 446,270 | 3.1 | % | $ | 454,091 | 1.4 | % | $ | 914,390 | $ | 886,407 | 3.2 | % | |||||||||||||
Uncollectible lease revenue | (2,498 | ) | (2,683 | ) | (6.9 | )% | (1,905 | ) | 31.1 | % | (4,403 | ) | (5,988 | ) | (26.5 | )% | |||||||||||||
Total revenue, including uncollectible lease revenue | 457,799 | 443,587 | 3.2 | % | 452,186 | 1.2 | % | 909,987 | 880,419 | 3.4 | % | ||||||||||||||||||
Rental revenue, excluding uncollectible lease revenue | 459,690 | 446,014 | 3.1 | % | 453,625 | 1.3 | % | 913,315 | 885,965 | 3.1 | % | ||||||||||||||||||
Uncollectible lease revenue | (2,498 | ) | (2,683 | ) | (6.9 | )% | (1,905 | ) | 31.1 | % | (4,403 | ) | (5,988 | ) | (26.5 | )% | |||||||||||||
Rental revenue, including uncollectible lease revenue | 457,192 | 443,331 | 3.1 | % | 451,720 | 1.2 | % | 908,912 | 879,977 | 3.3 | % | ||||||||||||||||||
Operating expenses, excluding uncollectible lease revenue | 131,025 | 125,751 | 4.2 | % | 126,340 | 3.7 | % | 257,367 | 251,983 | 2.1 | % | ||||||||||||||||||
Uncollectible lease revenue | 2,498 | 2,683 | (6.9 | )% | 1,905 | 31.1 | % | 4,403 | 5,988 | (26.5 | )% | ||||||||||||||||||
Operating expenses, including uncollectible lease revenue | $ | 133,523 | $ | 128,434 | 4.0 | % | $ | 128,245 | 4.1 | % | $ | 261,770 | $ | 257,971 | 1.5 | % | |||||||||||||
TABLE 2 | ||||||||||||||||
Q4 2018 | ||||||||||||||||
Established | Other Stabilized | Redevelopment | Development | |||||||||||||
Rental revenue, excluding uncollectible lease revenue | $ | 453,242 | $ | 70,302 | $ | 32,086 | $ | 2,282 | ||||||||
Uncollectible lease revenue | (2,023 | ) | (755 | ) | (147 | ) | (5 | ) | ||||||||
Rental revenue, including uncollectible lease revenue | 451,219 | 69,547 | 31,939 | 2,277 | ||||||||||||
Operating expenses, excluding uncollectible lease revenue | 124,954 | 22,760 | 9,738 | 1,165 | ||||||||||||
Uncollectible lease revenue | 2,023 | 755 | 147 | 5 | ||||||||||||
Operating expenses, including uncollectible lease revenue | $ | 126,977 | $ | 23,515 | $ | 9,885 | $ | 1,170 | ||||||||
• | Asset Densification Development Rights are when the Company develops additional apartment homes at existing stabilized operating communities the Company owns, and will be constructed on land currently associated with those operating communities. |
• | Conventional Development Rights are when the Company either has an option to acquire the land or enter into a leasehold interest, for which the Company is the buyer under a long-term conditional contract to purchase land, where the Company controls the land through a ground lease or owns the land to develop a new community. |
• | Public-Private Partnership Development Rights are when the Company has (i) an option to acquire the land, (ii) an option to enter into a leasehold interest or (iii) entered into a long-term conditional contract to purchase the land, where the Company is the designated developer in a public-private partnership with a local government entity. |
TABLE 3 | ||||||||
Q2 | YTD | |||||||
2019 | 2019 | |||||||
GAAP Gain | $ | 20,604 | $ | 36,986 | ||||
Accumulated Depreciation and Other | (13,792 | ) | (23,991 | ) | ||||
Economic Gain (Loss) | $ | 6,812 | $ | 12,995 | ||||
TABLE 4 | ||||
Q2 | ||||
2019 | ||||
Net income | $ | 168,305 | ||
Interest expense, net, inclusive of loss on extinguishment of debt, net | 50,239 | |||
Depreciation expense | 162,693 | |||
EBITDA | $ | 381,237 | ||
Gain on sale of communities | (20,530 | ) | ||
Joint venture EBITDAre adjustments (1) | 5,789 | |||
EBITDAre | $ | 366,496 | ||
Gain on other real estate transactions | (34 | ) | ||
Business interruption insurance proceeds | (435 | ) | ||
Severance related costs | 1,353 | |||
Development pursuit write-offs and expensed transaction costs, net | 1,327 | |||
Potential residential for-sale condominium marketing and administrative costs | 945 | |||
Legal settlements | 38 | |||
Core EBITDAre | $ | 369,690 | ||
(1) Includes joint venture interest, taxes, depreciation, gain on dispositions of depreciated real estate and impairment losses, if applicable, included in net income. | ||||
TABLE 5 | ||||||||||||||||
Q2 | Q2 | YTD | YTD | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income attributable to common stockholders | $ | 168,281 | $ | 254,662 | $ | 338,647 | $ | 396,305 | ||||||||
Depreciation - real estate assets, including joint venture adjustments | 164,830 | 156,289 | 329,576 | 314,772 | ||||||||||||
Distributions to noncontrolling interests | 12 | 11 | 23 | 22 | ||||||||||||
Gain on sale of previously depreciated real estate | (20,530 | ) | (105,201 | ) | (35,365 | ) | (105,201 | ) | ||||||||
FFO attributable to common stockholders | 312,593 | 305,761 | 632,881 | 605,898 | ||||||||||||
Adjusting items: | ||||||||||||||||
Joint venture losses | — | 7 | — | 7 | ||||||||||||
Joint venture promote (1) | — | — | — | (925 | ) | |||||||||||
Casualty gain, net on real estate | — | — | — | (58 | ) | |||||||||||
Business interruption insurance proceeds | (435 | ) | — | (607 | ) | — | ||||||||||
Lost NOI from casualty losses covered by business interruption insurance (2) | — | 832 | — | 1,730 | ||||||||||||
Loss on extinguishment of consolidated debt | 229 | 642 | 509 | 1,039 | ||||||||||||
Advocacy contributions | — | 303 | — | 606 | ||||||||||||
Severance related costs | 1,353 | 132 | 1,372 | 502 | ||||||||||||
Development pursuit write-offs and expensed transaction costs, net | 1,327 | 243 | 1,604 | 570 | ||||||||||||
Potential residential for-sale condominium marketing and administrative costs | 945 | 158 | 1,418 | 158 | ||||||||||||
Potential residential for-sale condominium imputed carry cost (3) | 506 | — | 506 | — | ||||||||||||
Gain on other real estate transactions | (34 | ) | (370 | ) | (301 | ) | (323 | ) | ||||||||
Legal settlements | 38 | 67 | (978 | ) | 367 | |||||||||||
Income taxes | — | — | (6 | ) | — | |||||||||||
Core FFO attributable to common stockholders | $ | 316,522 | $ | 307,775 | $ | 636,398 | $ | 609,571 | ||||||||
Average shares outstanding - diluted | 139,618,231 | 138,215,010 | 139,227,376 | 138,184,295 | ||||||||||||
Earnings per share - diluted | $ | 1.21 | $ | 1.84 | $ | 2.43 | $ | 2.87 | ||||||||
FFO per common share - diluted | $ | 2.24 | $ | 2.21 | $ | 4.55 | $ | 4.38 | ||||||||
Core FFO per common share - diluted | $ | 2.27 | $ | 2.23 | $ | 4.57 | $ | 4.41 | ||||||||
(1) Represents the Company's promoted interest in AvalonBay Value Added Fund II, L.P. | ||||||||||||||||
(2) Amount for 2018 is for the Maplewood casualty loss, which occurred in Q1 2017, and for which the Company recognized $3,495 in business interruption insurance proceeds in Q3 2017. | ||||||||||||||||
(3) Represents the imputed carry cost of potential for-sale residential condominium units where construction is complete and a potential for-sale condominium strategy is being pursued. The Company computes this adjustment by multiplying the Total Capital Cost of completed and unsold potential for-sale residential condominium units by the Company's weighted average unsecured debt rate. | ||||||||||||||||
TABLE 6 | |||
Core EBITDAre | $ | 369,690 | |
Interest expense, net | $ | 50,010 | |
Interest Coverage | 7.4 times | ||
TABLE 7 | |||
Total debt principal (1) | $ | 7,414,889 | |
Cash and cash in escrow | (330,044 | ) | |
Net debt | $ | 7,084,845 | |
Core EBITDAre | $ | 369,690 | |
Core EBITDAre, annualized | $ | 1,478,760 | |
Net Debt-to-Core EBITDAre | 4.8 times | ||
(1) Balance at June 30, 2019 excludes $9,346 of debt discount and $35,522 of deferred financing costs as reflected in unsecured notes, net, and $14,530 of debt discount and $3,274 of deferred financing costs as reflected in notes payable on the Condensed Consolidated Balance Sheets. | |||
TABLE 8 | ||||||||||||||||||||||||
Q2 | Q2 | Q1 | Q4 | YTD | YTD | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Net income | $ | 168,305 | $ | 254,543 | $ | 170,418 | $ | 385,636 | $ | 338,723 | $ | 396,133 | ||||||||||||
Indirect operating expenses, net of corporate income | 23,018 | 19,677 | 19,722 | 21,849 | 42,740 | 38,636 | ||||||||||||||||||
Expensed transaction, development and other pursuit costs, net of recoveries | 2,711 | 1,047 | 1,095 | 1,599 | 3,806 | 1,847 | ||||||||||||||||||
Interest expense, net | 50,010 | 56,585 | 47,892 | 55,180 | 97,902 | 111,698 | ||||||||||||||||||
Loss on extinguishment of debt, net | 229 | 642 | 280 | 14,775 | 509 | 1,039 | ||||||||||||||||||
General and administrative expense | 18,965 | 15,267 | 13,700 | 15,738 | 32,665 | 29,698 | ||||||||||||||||||
Joint venture (income) loss | (197 | ) | (789 | ) | 1,060 | (2,710 | ) | 863 | (2,529 | ) | ||||||||||||||
Depreciation expense | 162,693 | 156,685 | 162,057 | 158,914 | 324,749 | 315,743 | ||||||||||||||||||
Casualty and impairment loss (gain), net | — | — | — | 826 | — | (58 | ) | |||||||||||||||||
Gain on sale of communities | (20,530 | ) | (105,201 | ) | (14,835 | ) | (242,532 | ) | (35,365 | ) | (105,201 | ) | ||||||||||||
Gain on other real estate transactions | (34 | ) | (370 | ) | (267 | ) | (9 | ) | (300 | ) | (323 | ) | ||||||||||||
NOI from real estate assets sold or held for sale | (1,495 | ) | (19,680 | ) | (2,582 | ) | (12,483 | ) | (4,077 | ) | (40,377 | ) | ||||||||||||
NOI | $ | 403,675 | $ | 378,406 | $ | 398,540 | $ | 396,783 | $ | 802,215 | $ | 746,306 | ||||||||||||
Established: | ||||||||||||||||||||||||
New England | $ | 41,907 | $ | 40,750 | $ | 41,808 | $ | 42,257 | $ | 83,715 | $ | 80,441 | ||||||||||||
Metro NY/NJ | 73,212 | 70,412 | 71,843 | 72,783 | 145,055 | 139,429 | ||||||||||||||||||
Mid-Atlantic | 51,073 | 49,917 | 51,052 | 51,543 | 102,125 | 98,772 | ||||||||||||||||||
Pacific NW | 20,605 | 19,142 | 20,210 | 20,868 | 40,815 | 37,766 | ||||||||||||||||||
No. California | 67,384 | 66,133 | 68,238 | 66,826 | 135,622 | 130,946 | ||||||||||||||||||
So. California | 72,593 | 71,482 | 72,695 | 72,320 | 145,288 | 141,082 | ||||||||||||||||||
Total Established | 326,774 | 317,836 | 325,846 | 326,597 | 652,620 | 628,436 | ||||||||||||||||||
Other Stabilized | 50,813 | 38,776 | 49,211 | 46,871 | 100,024 | 75,000 | ||||||||||||||||||
Redevelopment | 22,587 | 22,131 | 22,040 | 22,202 | 44,627 | 43,396 | ||||||||||||||||||
Development | 3,501 | (337 | ) | 1,443 | 1,113 | 4,944 | (526 | ) | ||||||||||||||||
NOI | $ | 403,675 | $ | 378,406 | $ | 398,540 | $ | 396,783 | $ | 802,215 | $ | 746,306 | ||||||||||||
TABLE 9 | ||||||||||||||||
Q2 | Q2 | YTD | YTD | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenue from real estate assets sold or held for sale | $ | 2,591 | $ | 30,024 | $ | 7,193 | $ | 61,857 | ||||||||
Operating expenses from real estate assets sold or held for sale | (1,096 | ) | (10,344 | ) | (3,116 | ) | (21,480 | ) | ||||||||
NOI from real estate assets sold or held for sale | $ | 1,495 | $ | 19,680 | $ | 4,077 | $ | 40,377 | ||||||||
TABLE 10 | ||||||||
Low Range | High Range | |||||||
Projected EPS (diluted) - Full Year 2019 | $ | 5.78 | $ | 5.98 | ||||
Depreciation (real estate related) | 4.62 | 4.82 | ||||||
Gain on sale of communities | (1.27 | ) | (1.47 | ) | ||||
Projected FFO per share (diluted) - Full Year 2019 | 9.13 | 9.33 | ||||||
Adjustments related to potential residential for-sale condominiums at 15 West 61st Street (1) | 0.07 | 0.07 | ||||||
Other income, development pursuit and other write-offs | 0.02 | 0.02 | ||||||
Income taxes | 0.03 | 0.03 | ||||||
Projected Core FFO per share (diluted) - Full Year 2019 | $ | 9.25 | $ | 9.45 | ||||
(1) See Attachment 13 - 2019 Financial Outlook for additional detail. | ||||||||
TABLE 11 | ||||||||||||||||
Q2 | Q2 | YTD | YTD | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Rental revenue (GAAP basis) | $ | 457,192 | $ | 443,331 | $ | 908,912 | $ | 879,977 | ||||||||
Concessions amortized | 185 | 1,199 | 390 | 2,788 | ||||||||||||
Concessions granted | (118 | ) | (148 | ) | (396 | ) | (792 | ) | ||||||||
Rental Revenue with Concessions | ||||||||||||||||
on a Cash Basis | $ | 457,259 | $ | 444,382 | $ | 908,906 | $ | 881,973 | ||||||||
% change -- GAAP revenue | 3.1 | % | 3.3 | % | ||||||||||||
% change -- cash revenue | 2.9 | % | 3.1 | % | ||||||||||||
TABLE 12 | ||||
Year to Date | ||||
NOI | ||||
NOI for Established Communities | $ | 652,620 | ||
NOI for Other Stabilized Communities | 100,024 | |||
NOI for Redevelopment Communities | 44,627 | |||
NOI for Development Communities | 4,944 | |||
NOI from real estate assets sold or held for sale | 4,077 | |||
Total NOI generated by real estate assets | 806,292 | |||
NOI on encumbered assets | 57,578 | |||
NOI on unencumbered assets | $ | 748,714 | ||
Unencumbered NOI | 93 | % | ||
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